Gold Loans

With clearer RBI norms, easing microfinance stress and digital-first models, small finance banks are set for steady growth and deeper reach among underserved customers

Assets under management of non-banking financial companies specialising in gold loans are set to log a compound annual growth rate (CAGR) of about 40 per cent between this fiscal and next, surpassing Rs 4 lakh crore by March 2027, a report said. The surge will be driven by elevated gold prices, a shift towards secured credit and an evolved regulatory environment, outpacing the CAGR of 27 per cent clocked between fiscals 2023 and 2025, said the report by Crisil Ratings. Gold prices soared about 68 per cent in the first nine months of this fiscal year to an all-time high. "This enhances collateral values, enabling lenders to scale up disbursements," it said. Furthermore, amid the limited availability of credit from segments such as unsecured lending, borrowers are looking for other sources of funding. To capitalise on these lending opportunities, gold-loan NBFCs (both large and mid-size ones) have been expanding their market presence, despite stiff competition from banks, Crisil Rati

EMI-based repayment steadily reduces the principal and lowers LTV, offering better protection against price volatility than the bullet option

JM Financial said the non-bank lender's diversified retail-focused franchise, strong asset quality and expanding non-interest income engine position it well for sustained growth.

Muthoot Finance posted robust Q2FY26 earnings driven by higher gold prices and strong AUM growth, but analysts flag risks from yield pressure, NIM compression and regulatory uncertainty

Gold loans offer structure, overdrafts offer flexibility. Here's how to pick the smarter way to borrow against your gold.

Muthoot Finance shares have risen 47 per cent so far this year, while Manappuram Finance was up 48 per cent

Regulatory changes seek to ensure more discipline, transparency and protection for borrowers

With the revised rules, lenders can now extend working capital loans to any business that relies on gold as a raw material, expanding credit access beyond the jewellery sector

Muthoot Finance reported strong Q1FY26 results with 42% YoY AUM growth, improved asset quality, higher yields and strong recoveries as gold loans drove profitability

Shares of Muthoot Finance have surged 37.7 per cent so far in CY-25, while that of Manappuram Finance have rallied 54.6 per cent. Gold has surged 42 per cent in 2025

India's consumption loans grew 14.5% YoY in Q1FY26 to Rs 105.6 trillion, driven by gold loans, while personal loan growth slowed and credit card originations dropped sharply

Muthoot Microfin plans to grow AUM from ₹12,253 cr to ₹20,000 cr by FY27, raising secured loan share to 35% through LAP, gold co-lending and individual lending products

The RBI's new rules on lending against gold will lead to business model adjustment, and operational agility, service excellence will remain the key differentiator between lenders, S&P Global Ratings said on Thursday. Earlier this month, the RBI raised the loan-to-value (LTV) ratio for lending against gold to 85 per cent for borrowings under Rs 2.5 lakh from the present 75 per cent. The LTV ratio has been fixed at 80 per cent for loan amounts between Rs 2.5-5 lakh and 75 per cent for loans above Rs 5 lakh. Lenders have time until April 1, 2026, to prepare for the changes. In its report titled 'India's new rules on gold-backed loans may reshape the competitive landscape', S&P said the Reserve Bank of India's new rules on gold-backed loans will likely lead to business model adjustments in the country's booming lending niche. "In our view, operational agility and service excellence will remain the key differentiator between lenders," S&P said. S&P Global Ratings credit ...

Repo rate cut, liquidity infusing to aid NBFCs performance

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New guidelines exempt small-ticket gold loans from strict credit appraisal, aiming to boost formal sector lending and ease access for rural and semi-urban borrowers

The Reserve Bank is all set to raise the loan-to-value (LTV) ratio for lending against gold to 85 per cent for loans under Rs 2.5 lakh from the present 75 per cent, Governor Sanjay Malhotra announced on Friday. Speaking to reporters at the central bank headquarters, Malhotra said the relaxation will come with riders, and pointed out that both principal as well as interest will be included while computing the LTV as against the current industry practice of sticking only to the principal. "The LTV was 75 per cent till now. We are expanding it to 85 per cent for small loans of below Rs 2.5 lakh per borrower," Malhotra said, adding that this will be included in the final regulation on gold lending which has been in the works for some time. He said the revised norms are aimed at regulating the category in a better way with minimum risk. The Governor said state-owned lenders have been including both interest and principal while making gold loans under the current LTV limit of 75 per cent

In April, the Reserve Bank of India had proposed stricter rules for monitoring and disbursement of gold loans, which are often used by low-income borrowers

In April, the RBI released draft norms mandating, among other requirements, that borrowers furnish proof of ownership for the gold used as collateral