Gold Loans Surge 129% to Rs 3.38 Lakh Crore: RBI Bulletin

Mumbai: Driven by a surge in gold prices, outstanding loans against gold jewelry have recorded triple-digit growth since February 2025, far outpacing overall bank credit expansion, according to the Reserve Bank of India’s State of the Economy report for December 2025.

Loans against gold jewelry rose 128.5 per cent year-on-year to Rs 3.38 lakh crore during February--October 2025 for banks, showed the central bank data.

“Notably, loans against gold jewelry have surged and continued to record triple-digit growth rates since February 2025. The sharp expansion may be attributed to a surge in gold prices,” said the RBI. The uptrend continues to be supported by elevated geopolitical risks, steady central-bank accumulation, and persistent safe-haven demand.

This triple-digit expansion since February 2025 has far outpaced overall bank credit growth, nearly doubling gold loans’ share in total non-food credit. The share of gold loans in the overall non-food credit was 1.8 per cent in October 2025, relative to 0.9 per cent in October 2024. Share of gold loans in personal loans was 5.2 per cent in October 2025.

The standard gold price per 10 grams which was Rs 76713 in October 2024, rose to Rs 1.09 lakh in September 2025 and further to Rs 1.21 lakh in October 2025 and is currently hovering at Rs 1.39 lakh.

Economists in the article attribute the surge to a combination of high gold prices, softer interest rates, and easy accessibility of gold-backed credit compared with unsecured personal loans. Unlike personal loans or credit cards, gold loans typically carry lower interest rates and quicker disbursal, making them suitable for meeting working capital needs, seasonal expenses, or emergency consumption. Gold loan is a secured loan in which a borrower pledges gold jewellery/bars/coins as collateral. Interest rates typically range between 9-15 per cent, compared with 24-48 per cent for personal loans.