Page 30 - Bullion World Volume 4 Issue 11 November 2024

Bullion World | Volume 4 | Issue 11 | November 2024
Gold Loans by Banks and

NBFCs are Set to Reach

the Rs. 15 Trillion Mark

by March 2027: ICRA

• Organised gold loan market is
set to cross Rs. 10 trillion in the

current fiscal and reach 15 trillion
by March 2027
• NBFCs’ retail2 gold loans are

expected to expand at 17-19% in
FY2025

• Yield pressures have abated to
some extent, but remain lower
than the peak

ICRA forecasts the organised gold loans (GL) by banks 300 bps than the peak levels seen 4-5 years back.
and non-banking financial companies (NBFCs) to exceed
Rs.10 trillion in the current financial year and projects Overall organised GL expanded at a compounded
it to reach ~Rs.15 trillion by March 2027. The rating annual growth rate (CAGR) of 25% over the period
agency highlighted that banks remain dominant driven FY2020-FY2024, driven by banks, which expanded
by their gold jewellery-backed agriculture loans. At the these loans at a higher CAGR of 26%, while the NBFCs
same time, NBFCs hold the pole position in retail gold expanded theirs at 18% during the same period. Bank
loans and are expected to expand at 17-19% in FY2025. GL growth was driven by agriculture loans backed by
The moderation in competitive intensity is leading gold jewellery, which grew at a CAGR of 26% during
to some expansion in the loan yields of the NBFCs, FY2020-FY2024, while their retail GLs grew by 32% on
however their yields are expected to be lower by 200- a lower base. Consequently, the share of the NBFCs

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