Why NBFC gold loans are growing nearly 70% despite tighter RBI regulations
NBFC gold loans in India have surged by nearly 70% year-on-year, significantly outpacing the growth of overall retail credit. This trend persists despite the Reserve Bank of India's introduction of a stricter regulatory framework in 2025 aimed at curbing risky lending practices.
Why it matters
The rapid expansion of gold-backed credit highlights a high consumer demand for liquidity, posing potential systemic risks if regulatory oversight fails to keep pace with aggressive lending.
Loans against gold jewellery by non-banking financial companies (NBFCs) continued to expand sharply in June, growing nearly 70% year-on-year, according to Reserve Bank of India (RBI) data.Outstanding NBFC loans against gold jewellery rose 69.3% year-on-year to Rs 3.41 lakh crore at the end of June 2026, following a 69.9% increase in May. The pace of growth was significantly higher than the expansion in NBFCs' overall retail loan portfolio.The latest data point to sustained demand for gold-backed credit even as the RBI has tightened its regulatory framework for lending against precious-metal collateral.Gold loans grow faster than overall retail creditNBFC retail loans grew 20.3% year-on-year in June, accelerating from 14.3% growth a year earlier.
Get smarter about the news
Sign up free for a feed built around what you actually care about, Dive Deeper research on any story, and the full text of every article.
Create free accountAlready have an account? Sign in