Gold Loan Market Expected to Surge Over 30% by 2028, Report Reveals

A recent analysis by ICRA has projected a significant expansion in the gold loan sector, with organized gold loans from banks and non-banking financial companies (NBFCs) anticipated to exceed Rs 30 trillion by March 2028. This marks a considerable increase from approximately Rs 18 trillion recorded in March 2026. The report highlights a shift in borrower behavior, as many individuals transition from bullet repayment loans to more manageable monthly installment plans, a change prompted by the Reserve Bank of India's updated regulations. The organized gold loan market is expected to grow at a remarkable compound annual growth rate (CAGR) of over 30% during the fiscal years 2027 and 2028, indicating a robust demand for gold-backed financing options.

The report also indicates that while the market share of NBFCs is projected to rise to 23% by the end of the fiscal year 2027-28, the increasing competitive landscape may pose challenges for these institutions. As more players enter the market, there could be pressure on profit margins, potentially limiting the growth prospects for NBFCs. The overall gold loan portfolio has already seen impressive growth, with a CAGR of 38% from 2024-25 to 2025-26, and a remarkable surge of about 50% in the fiscal year 2025-26 alone. During this period, banks have expanded their gold loan books at a CAGR of 35%, while NBFCs have outpaced them with a higher CAGR of 54%, according to the ICRA findings.