India’s gold loan market has nearly tripled in size over three years, reaching ₹22.5 lakh crore in August 2026, but repayment stress is beginning to increase. TransUnion CIBIL data shows that loans overdue by 90 days or more rose to 0.30% of outstanding gold loan balances in August, almost double the March level.
The increase deserves attention, but it does not mean that a large share of gold borrowers are defaulting. The overall delinquency rate remains relatively low and was still below its level a year earlier. The more important warning is that repayment stress is concentrated among borrowers with multiple gold loans, previous missed payments and certain smaller-ticket borrowing patterns.
India’s Gold Loan Market Reaches ₹22.5 Lakh Crore
India’s outstanding gold loan portfolio reached ₹22.5 lakh crore in August 2026, almost three times its size in August 2023, according to a report by TransUnion CIBIL released on November 5.
The market now covers approximately 5.5 crore active borrowers, equivalent to 21% of India’s credit-active consumers.
The expansion reflects rising demand for secured credit, increasing gold prices and the convenience of borrowing against jewellery without selling it.
Gold loans allow households and businesses to access funds by pledging gold ornaments or other eligible gold assets as collateral. Borrowers can use the money for personal expenses, medical requirements, business needs and other financial commitments.
The rapid expansion has made gold-backed lending one of the most important segments of India’s retail credit market.
However, the growth in outstanding balances has also increased the importance of monitoring borrowers’ repayment capacity.
Gold Loan Delinquencies Nearly Double Since March
The most important finding in the TransUnion CIBIL report is the increase in overdue loans between March and August 2026.
Loans overdue by 90 days or more accounted for 0.30% of outstanding gold loan balances in August, compared with approximately 0.16% in March.
This represents an almost twofold increase in five months.
However, the year-on-year comparison tells a more balanced story. The August 2026 delinquency rate remained below the corresponding level recorded in August 2025.
This means repayment stress has increased recently, but the overall quality of the gold loan portfolio has not deteriorated continuously over the longer comparison period.
The distinction is important because a rising delinquency rate does not automatically indicate a systemic crisis.
At 0.30%, the share of outstanding balances overdue by at least 90 days remains relatively small. Nevertheless, the speed of the increase is something lenders will need to monitor.
| Gold loan market indicator | Latest reported figure |
|---|---|
| Outstanding gold loan portfolio | ₹22.5 lakh crore |
| Portfolio growth since August 2023 | Nearly 3 times |
| Active borrowers | 5.5 crore |
| Share of credit-active consumers | 21% |
| Loans overdue by 90 days or more in August | 0.30% |
| Delinquency in March 2026 | Approximately 0.16% |
| Borrowers with four or more gold loans | 27% of the portfolio |
| Delinquency among borrowers with four or more loans | 0.45% |
Figures are based on TransUnion CIBIL’s August 2026 analysis.
Borrowers With Multiple Gold Loans Face Higher Risk
One of the strongest risk indicators identified by TransUnion CIBIL is repeat borrowing.
The credit bureau found that borrowers with four or more gold loan accounts had a delinquency rate of 0.45%, compared with the overall portfolio rate of 0.30%.
That is 1.5 times the overall rate.
More importantly, borrowers with four or more gold loan accounts represent approximately 27% of the outstanding gold loan portfolio.
This means that a significant portion of the market consists of customers who have borrowed against gold multiple times.
Repeat borrowing is not necessarily a sign of financial distress. Customers may take additional loans because they need more funds, renew existing facilities or use different lenders.
However, multiple borrowing can make it difficult for lenders to understand a customer’s total financial obligations.
A borrower may have sufficient gold collateral for an individual loan but still struggle to manage repayments across several credit accounts.
TransUnion CIBIL Managing Director and CEO Bhavesh Jain said lenders need to assess the borrower’s overall credit profile instead of relying only on the value of pledged gold.
Smaller Gold Loans and Previous Missed Payments Raise Concerns
The report also identified previous repayment problems as an important indicator of future credit risk.
Of the 4.2 crore consumers who took a gold loan between July 2024 and June 2025, approximately 17% already had at least one credit obligation that was 30 days or more overdue in the month before taking the gold loan.
The proportion was particularly high among borrowers with CIBIL scores of 800 or below.
Among these borrowers:
- 29% of customers taking gold loans of up to ₹2.5 lakh had an existing overdue obligation.
- 27% of customers taking larger gold loans also had an existing overdue obligation.
- The comparable range for personal, business and property loans was 5%–18%.
The findings suggest that some borrowers are turning to gold-backed credit even when they already have repayment difficulties elsewhere.
However, CIBIL cautioned that its data does not establish whether borrowers are specifically using gold loans to repay other debts.
The report also found that borrowers with sanctioned gold loans of ₹10 lakh or more had a relatively low delinquency rate of 0.20%.
This suggests that loan size alone does not determine repayment risk. Borrowers’ existing obligations and previous repayment behaviour are also important.
Gold Loan Disbursements Rise in Value Despite Fewer Loans
Another important trend is the growing average size of gold loans.
During the April-June 2026 quarter, lenders disbursed approximately 3.7 crore gold loans worth ₹8.2 lakh crore.
The number of loans disbursed declined 15% year-on-year, but their total value increased 12%.
This indicates that the market is increasingly being driven by larger loan amounts rather than a rise in the number of new loans.
Loans exceeding ₹2.5 lakh grew 19% by volume.
The average outstanding amount per borrower has also doubled since 2023, reaching approximately ₹4.1 lakh.
| Gold loan disbursement indicator | April-June 2026 |
|---|---|
| Number of loans disbursed | 3.7 crore |
| Total disbursement value | ₹8.2 lakh crore |
| Year-on-year change in loan volume | Down 15% |
| Year-on-year change in disbursement value | Up 12% |
| Growth in loans above ₹2.5 lakh | 19% |
| Average outstanding per borrower | Approximately ₹4.1 lakh |
The trend is important for lenders because larger loans can increase their exposure to individual borrowers.
Although gold provides collateral, lenders still need to ensure that borrowers can repay their obligations within the agreed period.
Women and Gen Z Are Becoming Important Gold Loan Borrowers
The gold loan market is also expanding across different demographic groups.
TransUnion CIBIL reported that Gen Z accounted for approximately one in five gold loan originations. The number of Gen Z borrowers increased 19% year-on-year, the fastest growth among age groups.
Women accounted for 41% of gold loan originations, compared with 40% previously.
The geographical distribution of borrowing is also changing. Approximately two-thirds of gold loan originations came from semi-urban and rural markets.
While southern India continues to account for the largest share of outstanding gold loans, growth over the five months to August was stronger in western, eastern and northeastern states.
These developments show that gold-backed lending is becoming more widespread beyond its traditional customer base.
The growing participation of younger borrowers and women also reflects the increasing use of household gold as a source of accessible credit.
Some Borrowers Improve Their Repayment Behaviour After Taking Gold Loans
Despite the rise in recent delinquencies, the CIBIL report also identified an encouraging trend.
Approximately 42% of borrowers who had repayment difficulties before taking a gold loan were current on all their active credit obligations 12 months later.
The credit bureau refers to this improvement as the curing rate.
It measures the proportion of borrowers who move out of delinquency during the 12 months following loan origination.
CIBIL said borrowers experiencing financial stress who take gold loans were more likely to regularise their repayment behaviour than stressed borrowers using certain other unsecured credit products.
However, the bureau cautioned that this does not establish that gold loans directly caused the improvement.
The findings instead show that some borrowers are able to improve their repayment position after accessing gold-backed credit.
What Rising Gold Loan Defaults Mean for Banks and NBFCs
The growing gold loan market represents a major opportunity for banks and non-banking financial companies (NBFCs).
Gold loans are secured by physical assets, which can reduce lenders’ exposure compared with unsecured personal loans.
If borrowers fail to repay, lenders may be able to recover outstanding dues through the legally prescribed collateral auction process.
However, the value of pledged gold alone cannot guarantee that a loan is risk-free.
Lenders must account for gold-price movements, collateral valuation, loan-to-value ratios and borrowers’ overall financial obligations.
The rise in multiple borrowing also creates a need for better credit-bureau checks and borrower-level exposure assessments.
For lenders, the challenge will be to continue expanding the gold loan business without weakening underwriting standards.
The Bigger Picture
India’s gold loan market is growing rapidly because it offers households and businesses access to credit using an asset they already own. The increase to ₹22.5 lakh crore demonstrates how important gold-backed lending has become in the country’s financial system.
However, the near-doubling of 90-day delinquencies between March and August highlights emerging repayment risks. The overall delinquency level remains low and below its year-earlier level, but borrowers with multiple loans and previous missed payments require closer attention.
The central issue for lenders is no longer simply how much gold a customer can pledge. It is whether that customer can manage the total amount of debt accumulated across different lenders.
Looking Ahead
Banks and NBFCs will closely monitor gold loan delinquencies, repeat borrowing and the average loan amount per customer over the coming quarters. If multiple borrowing continues to increase, lenders may need to strengthen credit checks and assess customers’ existing liabilities more carefully before approving additional loans.
For borrowers, gold loans can provide access to funds without selling family jewellery, but taking multiple loans can create repayment pressure. The long-term sustainability of India’s gold loan market will depend on responsible lending, transparent collateral valuation and the ability of borrowers to repay their obligations on time.
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