Veena Venugopal Published August 25 2026 Indian conglomerates are aggressively entering the gold-backed loan sector as household gold holdings and rising prices drive unprecedented growth. The Aditya Birla Group announced plans to launch a dedicated gold-loan franchise with over 1,000 branches nationwide. Tata Capital acquired Yogloans last month, while Godrej Capital took over the gold-loan business of Kanakadurga Finance.

Loans against gold have grown at a compound annual rate exceeding 42% since March 2024, per the Reserve Bank of India, with year-on-year growth nearing 70% in May and June—far outpacing overall retail loan growth of around 20%. Indian households hold an estimated 25,000 tonnes of gold, mostly in jewellery, tying demand to cultural events like weddings and festivals. Once seen as a last resort for rural and financially strained borrowers, gold-backed loans are now mainstream due to low risk, easy liquidation of collateral, and RBI regulatory updates.

Effective April 2026, the RBI raised the loan-to-value ratio to 85% for loans up to Rs250,000 and 80% for those up to Rs500,000, while maintaining a 75% cap on larger loans. The framework also tightened credit-appraisal norms to promote discipline in a market previously reliant on convenience. JPMorgan Chase’s entity was suspended from markets, though unrelated to the lending surge.