India is witnessing an unprecedented surge in gold loans, with people increasingly pledging their gold jewellery to meet financial needs. According to RBI data released on Friday, the outstanding amount under gold loans has soared by 128.5% over the past year, reaching ₹3.38 lakh crore by October 2025. From March 2025 alone, the rise stands at 63.6%.
Why Are Gold Loans Rising So Fast?
A major factor behind this sharp jump is a regulatory shift. In May 2024, banks began classifying agriculture-related gold loans under the retail gold loan category, significantly increasing the size of the segment.
Additionally:
- Gold loans have become a preferred borrowing option due to their secured nature, easy availability, and quick processing.
- Personal loan growth remains strong, but nearly one-fourth of all new personal loan additions in the past year came from gold loans alone.
By comparison, total personal loans grew 14% to reach ₹64.56 lakh crore by October 2025.
Growth in Secured Loans Continues
Secured loan categories continue to dominate India’s credit expansion:
- Housing loans up 11% to ₹31.87 lakh crore
- Auto loans up 12.5% to ₹6.77 lakh crore
- Education loans up 14.7% to ₹1.49 lakh crore
Banks noted that the overall demand for secured loans remains robust due to greater financial stress in households and rising cost of living.
Unsecured Loans Show Slower Growth
In contrast, unsecured loans expanded at a much slower pace:
- Consumer durable loans up only 1% to ₹23,646 crore
- Credit card outstanding up 7.7% to ₹3.03 lakh crore
- Other personal loans up 9.9% to ₹16.17 lakh crore
Despite this, retail lending remains a major driver of bank credit growth.
Bank Credit at Multi-Year High
Total bank credit in India grew 11.3%, reaching ₹193.9 lakh crore by October 2025. Non-food credit followed a similar trend, rising 11.1% to ₹193.2 lakh crore.
In the non-retail segment, the services sector is leading the credit growth:
- Computer software: 29.4%
- Shipping: 28%
- Commercial real estate: 14.1%
Loans to NBFCs also increased 10.9% to ₹17.04 lakh crore.
Industry and Priority Sector Trends
- Credit to industries grew 10% to ₹41.93 lakh crore.
- Loans to micro and small industries surged 25.9%, reaching ₹9.54 lakh crore.
- Medium industries received 17.6% more credit.
- Large enterprises, however, saw only 4.6% growth, indicating a shift towards raising funds via bonds, equity, or foreign lenders.
- Agricultural credit grew 8.9% to ₹24.03 lakh crore.
In priority sectors:
- Renewable energy loans grew 52.1%
- Priority housing loans up 32.7%
- Loans to micro and small enterprises up 25.8%
- Social infrastructure and export credit saw declines
Bottom Line
The surge in gold loans reflects both economic stress and shifting credit strategies. With households seeking quick liquidity and banks expanding their secured loan portfolios, gold loans have emerged as the fastest-growing lending category in India.
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