MUMBAI: Organised gold loans (GLs) provided by banks and non-banking financial companies (NBFCs), is expected to expand at a compound annual growth rate (CAGR) of over 30 per cent during 2026-27 to 2027-28, crossing Rs. 30 lakh crores by March 2028 from around Rs 18 lakh crore in March 2026, rating agency ICRA said on Wednesday.
While the market share of NBFCs is projected to continue to rise to 23 per cent by 2027-28, increasing competitive intensity could exert pressure on their business yields and limit upside. In ICRA’s assessment, GL-focussed NBFCs will need to strengthen risk management as their product offering evolves.
The ratings agency cautioned that in case of NBFCs, the shift towards regular repayment loans from higher LTV offerings and other changes could raise near-term delinquencies. However, credit losses shall be limited, considering the liquid nature of the collateral.
This month, two large NBFCs have announced plans to acquire smaller NBFCs specialising in gold loans. Godrej Capital, the financial services arm of the Godrej Group announced the acquisition of the gold loan business of Kanakadurga Finance through its subsidiary, Godrej Finance, for an undisclosed sum.
This was followed by Tata Capital that announced that it will acquire about 88.6 per cent stake in Thrissur-based Yogakshemam Loans Ltd (Yogloans) at pre-money equity valuation of Yogloans not exceeding ₹318 crore.
The overall GL book increased at a CAGR of 38 per cent during 2024-25 to 2025-26, with significant growth of about 50 per cent in 2025-26.
During this period, banks expanded their GL book at a CAGR of 35 per cent, while NBFCs saw a higher CAGR of 54 per cent. Consequently, the share of NBFCs in the overall GL assets under management (AUM) rose in 2025-26, after contracting steadily over the previous three years. The share of banks in GL AUM declined to about 78 per cent in March 2026 from 82 per cent in March 2024, while the share of NBFCs rose during the period.
R Srinivasan, Sector Head, Financial Sector Ratings, ICRA, said: “The entry of new players and large NBFCs in the GL space – whether organically or through acquisitions – along with their plans to
significantly expand their branch networks, supports the strong growth outlook for this segment, particularly amid the stress in unsecured lending in the recent past.”
“Banks are also steadily widening their GL offerings across their extensive branch networks, which should further support segmental growth. These structural drivers are expected to sustain the rise in
GLs, even as gold prices have softened somewhat after the surge seen in the previous fiscal.”
Growth was driven by retail GLs of NBFCs and banks. The rating agency noted that the growth in the GL book of NBFCs in the past five years was largely driven by gold prices, as branch additions and the tonnage of gold jewellery held as collateral rose at a modest pace of 3-4 per cent vis-à-vis the 24 per cent expansion in the loan book of large players during 2021-22 to 2025-26.
With the entry of new players, the concentration of the NBFC GL book among the top 4 players declined steadily to 70 per cent of the NBFC GL AUM in March 2026 from about 90
per cent in March 2022.