Bank Loans Against Gold Rise 125% in a Year: RBI Data

Bank loans against gold rose 125% year-on-year to about ₹3.50 lakh crore by end-November 2025, according to Reserve Bank of India (RBI) data.  

This was the fastest growth among major credit segments and was significantly higher than the overall bank credit growth of around 11.5% during the period. 

Rising Gold Prices Support Lending 

The increase in gold-backed loans coincided with a sharp rise in gold prices. During 2025, prices of 24-carat gold climbed nearly 64% to around ₹1.35 lakh per 10 grams.  

The price rise increased the collateral value of pledged jewellery, allowing borrowers to access higher loan amounts against the same quantity of gold. 

Share in Incremental Credit Rises 

Although gold loans accounted for less than 2% of total outstanding bank credit, they contributed nearly 12% of incremental lending up to November 2025.  

Over the past 12 months, additions to banks’ gold loan books were estimated at around ₹1.5 lakh crore, following a 77% rise recorded in the previous year. 

Banks Gain Market Share 

Banks strengthened their position in the gold loan segment and held 50.35% of outstanding gold loans, as per the RBI’s Trends and Progress report.  

Non-banking finance companies (NBFCs) also expanded their portfolios, with industry estimates placing their outstanding gold loans at about ₹3.00 lakh crore. 

Reasons Cited by Lenders 

Lenders attributed the growth to three factors. These included a preference for secured lending, higher borrowing capacity due to rising gold prices, and a limited reclassification after RBI clarified that farm loans backed by gold jewellery should be classified as gold loans. 

Shift in Credit Trends 

The data indicated a shift in the composition of bank lending. Large industry, which forms about 15% of outstanding credit at ₹28.7 lakh crore, accounted for only 3.6% of incremental loans. This showed continued deleveraging and lower reliance on bank borrowing by large firms. 

Other Segments Show Mixed Trends 

Personal loans remained the largest contributor to incremental credit, accounting for close to 40% of new lending, while services added about 20%, supported by NBFCs and trade. Vehicle loans rose to around ₹6.80 lakh crore, while consumer durable loans declined after the festive season. 

Read More: RBI Gold Loan Guidelines 2025 Recap: 7 Big Changes Borrowers and Lenders Should Know! 

Conclusion 

With total bank credit at ₹195.2 lakh crore as of November 2025, the rise in gold loans points to a continued tilt towards secured and smaller-ticket lending within the banking system. 

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