Non-banking financial companies in India continue their rapid growth in gold-backed lending with outstanding loans reaching Rs 3.41 lakh crore in June, driven by increased demand amidst tighter RBI oversight.
Non-banking financial companies in India extended their rapid push into gold-backed lending in June, with outstanding loans against gold jewellery rising 69.3% from a year earlier to Rs 3.41 lakh crore, according to Reserve Bank of India data released on August 8. The increase followed 69.9% annual growth in May, underscoring how strongly the segment has outpaced the wider retail lending book.
The RBI said housing, vehicle finance and loans against gold jewellery were among the retail categories showing the strongest credit expansion. Overall retail loans at NBFCs rose 20.3% year-on-year in June to about Rs 25.62 lakh crore, compared with Rs 21.29 lakh crore a year earlier. Within that basket, housing loans increased 11.4% to roughly Rs 8.44 lakh crore, vehicle loans climbed 15.2% to about Rs 6.24 lakh crore and consumer durable lending jumped 46.8% to Rs 72,201 crore.
The latest June figures show that the rally in gold lending did not fade after May, when Reuters partner reports and other Indian business publications said NBFC gold loans had already reached about Rs 3.29 lakh crore, placing them among the fastest-growing parts of the sector. That momentum has been notable even as NBFCs’ broader loan growth has trailed banks in some periods, suggesting borrowers are increasingly turning to gold as readily available collateral.
The expansion has also unfolded against tighter oversight. The RBI introduced its Lending Against Gold and Silver Collateral Directions, 2025, in June last year after flagging weaknesses in gold-loan practices in September 2024, including the use of third parties, due diligence gaps, loan-to-value monitoring and auction transparency. In the broader credit market, industry lending grew 6.7% year-on-year in June, slower than a year earlier, while services credit growth eased to 17.6%; agriculture and allied lending, by contrast, accelerated to 17.9%. The RBI said the provisional figures are based on a sample of NBFCs in the Upper and Middle Layers and housing finance companies that account for about 87% of the credit data it tracks.
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