NBFC – Retail & Commercial Finance
NBFC gold loan AUM is expected to
expand by 30-35% in FY2026 upheld by
the strength witnessed in gold prices.
Sharp increase in the scale, driven by
gold prices, can somewhat offset the
cost impact of additional
operational requirements, as directed
in the final regulatory directions for
gold loans.
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ICRA expects the organised gold loan (GL) market to reach the Rs. 15 trillion mark in FY2026, a year earlier
than previously expected. Overall GLs expanded at a CAGR of about 26% in FY2024 and FY2025, with banks
showing a slightly higher growth rate vis-à-vis NBFCs.
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Public sector banks (PSBs) remain dominant players in the space, driven by agriculture and other loans that are
backed by gold jewelry. During FY2024 and FY2025, PSB GL grew at a CAGR of 27%, while GL from private
sector banks expanded at a relatively slower CAGR of 22%, despite a lower base.
Exhibit: Gold price trend – Monthly average (Rs. per gram)
Source: CMIE, ICRA Research; 1- 995 purity; Rs. per gram; Amount in the boxes indicates period average price and YoY growth trend; *Growth over the period 5M FY2026
