Bank loans against gold surged 125% as of November-end from a year earlier, show latest Reserve Bank of India data, as a rally in the yellow metal increased its collateral value and enabled borrowers to take larger loans.
While vehicle loans rose 11% on the back of higher demand for passenger and commercial vehicles following a cut in goods and services tax, consumer durable loans contracted, likely due to festive season demand ending in October.
Over the past year, gold loans have been the fastest-growing portfolio, with growth doubling in the last six months on a year-on-year basis, RBI data show. Outstanding gold loans jumped from ₹898 crore in November 2023 to ₹1.59 lakh crore by November 2024, and further to ₹3.5 lakh crore as of November 2025.
Gold prices rose nearly 64% in 2025, reaching about ₹1.35 lakh per 10 grams of 24 karat gold. Manish Mayank, head, gold loan business, at IIFL Capital highlights the change over the past year.Banks Overtake NBFCs
“The sharp growth in gold loans reflects a structural shift in how small entrepreneurs and households access credit,” said Mayank. “Gold loans meet urgent, short-tenure working capital needs with speed, transparency and minimal documentation. The secured nature of the product has created a win-win, lowering risk for lenders while offering borrowers affordable, flexible credit without disrupting cash flows.”
Non-banking finance companies (NBFCs) expanded their gold loan book, with outstanding loans at Rs 3 lakh crore, according to industry estimates. Banks, meanwhile, overtook NBFCs in gold loan market share, holding 50.35%, with the remainder accounted for by finance companies, according to RBI’s latest Trends and Progress report.
Muthoot Finance, Manappuram and IIFL Finance are among the largest gold loan financiers.The combined gold loans of banks and NBFCs had a 5.8% share in total outstanding loans as of September-end, RBI’s Financial Stability Report showed.
Vehicle loans climbed to ₹6.8 lakh crore by end of November, aided by the GST cut and festive offers. Other segments posting strong growth included personal loans (12.7%), commercial real estate (12.5%) and services (11.7%). Loans to NBFCs and industry rose 9.5% each.
Within personal loans, some sub-categories moderated as their share in outstanding loans dipped. The share of home loans fell from 16.66% to 16.43% year-on-year, while credit card outstanding declined from 1.66% to 1.52%.
“The data show that consumption has eased a bit with the conclusion of the festive season by end-October and could remain the case unless wage growth picks up,” ICICI Bank said in a research report.
Loans to the housing sector rose 9.8% year-on-year to ₹31.9 lakh crore, aided by lower home loan rates since the beginning of this year. Loans to NBFCs at ₹17.2 lakh crore rose 9.5% year-on-year, but the growth was slower compared with 10.9% in October.
Sector-wise credit data indicate that bank credit grew the most for trade, up 14% to ₹12.3 lakh crore, supported by relief measures announced by the government and RBI. The regulator allowed banks to provide moratoriums on loans to exporters until December to ease payment pressures caused by a 50% tariff imposed by the US government.