Big Indian corporations move into booming gold-loan market as demand surges

Tue Aug 25 2026

Major Indian business groups are seeking a larger share of the country's rapidly expanding **gold-backed lending market**, with companies including the **Aditya Birla Group, Tata Capital and Godrej Capital** moving into or expanding their presence in the sector, the *Financial Times* reported. The push comes as loans secured against gold have grown sharply, attracting larger financial institutions to a business traditionally dominated by specialist lenders.

According to the *Financial Times*, citing Reserve Bank of India data, loans against gold have been growing at more than 42% annually since March 2024, with growth accelerating to around 70% year-on-year in May and June 2026. The RBI's regulatory framework permits regulated lenders to extend credit against eligible gold jewellery, subject to prescribed valuation, loan-to-value and risk-management requirements.

Why gold loans are attracting corporate interest

Gold loans allow borrowers to raise funds by pledging gold jewellery as collateral. Because the lender holds a physical asset that can generally be sold if a borrower defaults, the product can offer a comparatively straightforward form of secured lending.

India's large household holdings of gold provide a substantial potential collateral base. The growth of the formal financial sector has also helped shift gold-backed borrowing from a predominantly informal financing channel toward mainstream lending.

The recent surge in gold prices has further increased the rupee value of jewellery that households can pledge, although lenders remain subject to regulatory limits on how much they can lend against the assessed value of gold.

The RBI's current framework includes a **75% loan-to-value ceiling** for several categories of regulated gold lending.

Larger players enter established market

The entry of large corporate groups could intensify competition with established gold-focused lenders, including companies that have built extensive branch networks specifically around gold-backed credit.

For newer entrants, scale, technology and access to capital could help them compete for customers while expanding gold lending beyond its traditional regional base.

The shift also reflects broader changes in India's financial sector, where established conglomerates and diversified financial-services companies are increasingly looking for high-growth lending segments.

At the same time, gold lending requires specialised infrastructure. RBI rules require lenders handling pledged jewellery to maintain appropriate systems for valuation, storage, security and customer verification. For NBFCs focused substantially on gold-backed lending, the central bank has historically imposed specific requirements covering vaults, security arrangements and branch expansion.

Regulation becomes increasingly important

The rapid expansion of the sector is occurring alongside tighter regulatory attention.

The RBI has sought to standardise how pledged gold is valued and has required lenders to maintain safeguards covering ownership verification, storage and auctions in cases of non-repayment.

These rules are designed to protect borrowers and lenders while limiting risks associated with rapid growth in secured lending.

The central bank's broader regulatory framework also requires lenders to maintain appropriate loan-to-value ratios and risk controls.

Competition could reshape gold lending

The arrival of large corporate players could change how India's gold-loan industry operates. Companies with strong digital platforms and established financial-service networks could potentially reduce processing times and reach borrowers beyond traditional gold-loan branches.

For existing lenders, however, greater competition could put pressure on pricing, customer acquisition costs and branch economics.

The trend also comes as Indian households continue to hold substantial quantities of gold, making the asset an important source of liquidity during periods when borrowers need relatively quick access to credit.

What comes next

The gold-loan market is likely to remain closely watched as major financial groups expand their offerings and established lenders respond to the new competition.

The pace of growth will depend on gold prices, household borrowing demand, lending standards and regulatory requirements. The RBI's oversight will remain central to ensuring that rapid expansion does not weaken underwriting or collateral-management practices.

For India's financial sector, the corporate push into gold-backed lending signals that gold is increasingly being treated not only as a store of wealth, but also as a significant source of secured household credit.

Source: https://businessupturn.com/