India’s gold loan market has expanded rapidly over the past three years, with outstanding balances reaching ₹22.5 trillion in August 2026, nearly three times the level recorded in August 2023. However, the rapid expansion is beginning to bring repayment risks into sharper focus. Delinquencies in the portfolio almost doubled between March and August this year, according to a new report by TransUnion CIBIL.
The increase comes as lenders disburse fewer loans but sanction higher amounts, reflecting a shift towards larger-ticket borrowing and repeat customers. Although the overall level of serious overdue loans remains relatively low and year-on-year delinquency has improved, the latest figures suggest that lenders need to pay closer attention to borrowers’ existing debt, repayment history and total exposure rather than relying only on the value of pledged gold.
Gold Loan Portfolio Reaches ₹22.5 Trillion
TransUnion CIBIL’s November 2026 report, Lending Unlocked: Gold Loans, puts India’s outstanding gold loan balances at ₹22.5 trillion as of August 2026. The portfolio has nearly tripled in three years and now covers approximately 55 million borrowers, equivalent to 21% of India’s credit-active consumers.
Gold loans allow individuals to borrow against pledged jewellery or other eligible gold assets. They are commonly used to meet short-term personal, household and business funding requirements. Since the loan is secured by collateral, lenders can offer access to credit even to some borrowers who may not qualify easily for unsecured loans.
However, the latest growth is not simply being driven by more people taking loans. Larger borrowing amounts and repeat transactions are becoming increasingly important to the market.
Delinquencies Nearly Double Between March and August
One of the report’s key findings is the rise in repayment stress during the five months to August 2026.
Loans overdue by 90 days or more accounted for 0.30% of outstanding gold loan balances in August. TransUnion CIBIL said this delinquency measure had nearly doubled compared with March 2026, although it remained below the level recorded in August 2025.
This distinction is important. The latest deterioration indicates that repayment stress increased during the first part of 2026, but it does not mean that the overall portfolio has become worse than it was a year earlier.
TransUnion CIBIL Managing Director and CEO Bhavesh Jain said the increase in stress was linked to factors such as the number of gold loans held by a borrower, previous repayment behaviour and loan size.
The report also highlights differences between borrowers with multiple gold loans and those with larger individual loans.
| Borrower category | Delinquency rate |
|---|---|
| Overall gold loan portfolio | 0.30% |
| Borrowers with four or more gold loan trade lines | 0.45% |
| Borrowers with sanctioned loans of ₹10 lakh or more | 0.20% |
Borrowers with four or more gold loan trade lines account for 27% of the gold loan book. Their delinquency rate is 1.5 times the overall portfolio rate, making repeat borrowing an important risk indicator for lenders.
Smaller Loans and Multiple Borrowings Need Closer Monitoring
The report suggests that borrowers with several active gold loans are more vulnerable to repayment difficulties than the broader customer base.
Having multiple gold loan accounts does not automatically mean that a borrower is financially distressed. However, it can indicate that the borrower is relying repeatedly on secured credit to meet funding requirements. If income does not rise alongside borrowing, repayment obligations can become more difficult to manage.
The credit bureau also examined borrowers who had taken gold loans between July 2024 and June 2025. Of the 42 million consumers in this group, 17% already had at least one credit obligation that was 30 days or more overdue in the month before taking the gold loan.
Among borrowers with CIBIL scores of 800 or below, 29% of those taking gold loans of up to ₹2.5 lakh and 27% of those borrowing larger amounts had an overdue obligation before taking the loan. The corresponding range for personal, business and property loans was 5% to 18%.
These findings underline why collateral value alone may not provide a complete picture of a borrower’s ability to repay.
Gold Loan Disbursements Shift Towards Larger Tickets
The market is also undergoing a change in the size and composition of new loans.
During the quarter ended June 2026, lenders disbursed approximately 37 million gold loans worth ₹8.2 trillion. Loan volumes declined 15% year-on-year, but the total value of disbursements increased 12%.
Loans above ₹2.5 lakh grew 19%, indicating that larger-ticket loans are contributing more to market expansion.
| Indicator | Latest reported trend |
|---|---|
| Outstanding gold loan balances, August 2026 | ₹22.5 trillion |
| Active gold loan borrowers | 55 million |
| Loans disbursed in June 2026 quarter | 37 million |
| Value of quarterly disbursements | ₹8.2 trillion |
| Year-on-year change in loan volume | -15% |
| Year-on-year change in disbursal value | +12% |
| Growth in loans above ₹2.5 lakh | +19% |
The average outstanding amount per borrower has doubled since 2023. Around 67% of customers taking a gold loan already have a gold loan in their credit history, highlighting the importance of repeat borrowing to the industry.
The trend presents an opportunity for banks and non-banking financial companies (NBFCs) to deepen relationships with existing customers. At the same time, it increases the importance of monitoring the borrower’s total debt across lenders.
Rural Markets, Women and Gen Z Drive Participation
Gold lending continues to have a strong presence outside India’s largest cities. Approximately two-thirds of gold loan originations came from semi-urban and rural markets, according to the report.
Women accounted for 41% of gold loan originations, up from 40%. Gen Z borrowers also represented one in five originations, with the number of such borrowers increasing 19% year-on-year.
The expansion reflects the role of gold jewellery as a household financial asset, particularly in markets where borrowers may prefer secured loans over other forms of credit.
Rising gold prices have also supported the segment by increasing the value of jewellery that customers can pledge. TransUnion CIBIL identified demand for credit, convenience and gold price appreciation as important factors behind market growth.
However, the bureau said it did not have data establishing that tighter lending conditions for unsecured credit had directly caused the increase in gold loan demand.
Borrowers Under Financial Stress Sometimes Improve Repayment
The report also provides a more nuanced picture of borrowers who take gold loans despite having existing overdue obligations.
Around 42% of borrowers who had at least one loan overdue by 30 days or more before taking a gold loan were current on all their loans 12 months later. TransUnion CIBIL describes this as the curing rate.
This suggests that some financially stressed borrowers may subsequently regularise their repayments. However, the credit bureau cautioned against assuming that gold loans directly caused the improvement. It said it did not have visibility into how borrowers used the funds or whether they used them to repay existing debt.
The report also found that borrowers who had missed more than one payment in the preceding six months were substantially more likely to become overdue on a credit obligation in the following six months. Among a group of approximately 30 million borrowers with previously strong credit profiles, 7% became overdue between January and June 2026. The share rose to 24% among those who had missed more than one payment in the previous six months.
What the Rising Stress Means for Banks and NBFCs
The figures come amid wider signs of pressure in parts of the gold lending industry. Reuters reported in October that Shriram Finance’s gross Stage 3 gold loans, representing loans overdue by more than 90 days, increased to 3.12% of its gold loan portfolio in the September quarter, compared with 2.57% in the preceding quarter and 2.28% a year earlier.
That company-specific measure should not be confused with TransUnion CIBIL’s 0.30% figure for the wider market. The two figures cover different portfolios and measurement bases.
For lenders, the challenge is to balance growth with stronger underwriting. This means assessing a customer’s existing loans, recent missed payments, income and repayment capacity, alongside the quality and value of pledged gold.
The Bigger Picture
India’s gold loan industry is becoming a larger part of the country’s formal credit market. Its expansion is creating opportunities for banks and NBFCs to reach customers in rural and semi-urban areas, offer secured financing and build repeat relationships. Yet the rise in multiple borrowing and the recent increase in serious overdue accounts show that collateral does not eliminate credit risk.
The next phase of growth will depend on whether lenders can identify borrowers who are taking on more debt than they can comfortably repay. A larger gold loan book may support financial inclusion and business activity, but sustainable expansion will require a clearer understanding of borrower-level indebtedness and repayment behaviour.
Looking Ahead
Lenders are likely to place greater emphasis on borrower-level credit checks as the gold loan market expands. Monitoring multiple gold loan accounts, recent payment delays and total outstanding obligations could become increasingly important, particularly for smaller-ticket borrowers and customers with a history of missed payments.
For borrowers, gold loans can provide access to funds without selling family jewellery, but taking several loans or repeatedly pledging the same asset can increase financial pressure. The rise in delinquencies is a reminder that borrowers should evaluate repayment capacity and the total cost of borrowing before using gold as collateral.
Get the day’s top stories in your inbox
One concise email. No spam, unsubscribe anytime.
