Loans against gold jewellery are emerging as the strongest driver of retail credit growth, outpacing all other personal loan categories by a wide margin. According to the latest RBI data, outstanding gold-backed loans surged 128.5% year-on-year to Rs. 3.38 lakh crore as of October 2025, and grew 63.6% since March 2025.

This sharp rise means that nearly one-fourth of all new additions to banks’ personal loan books in the past year came from gold loans alone, underscoring a clear shift in consumer borrowing preferences toward secured, asset-backed credit.

A key factor behind this jump is the May 2024 reclassification, where agricultural loans secured against jewellery were moved into the retail gold-loan category, aligning with regulatory norms. However, even beyond reclassification, demand for loans against jewellery continues to gain momentum due to their speed, flexibility, and lower interest rates compared to unsecured options.

Secured Loans Lead Retail Credit

The broader retail credit ecosystem continues to favour secured lending:

• Housing loans grew 11% to Rs. 31.87 lakh crore
• Vehicle loans rose 12.5% to Rs. 6.77 lakh crore
• Education loans increased 14.7% to Rs. 1.49 lakh crore

In contrast, unsecured credit showed muted growth:

• Consumer durable loans grew just 1%
• Credit card outstanding rose 7.7%
• Other personal loans increased 9.9%

The slowdown in unsecured lending further strengthens the position of gold loans as a dependable, collateral-backed credit option for households, small businesses, and farmers.

Bank Credit Growth Supported by Retail Demand

Overall bank credit grew 11.3% year-on-year to Rs. 193.9 lakh crore, with personal loans remaining the strongest pillar. Services, NBFCs, and MSMEs also contributed significantly to non-retail credit expansion.

A Structural Shift Toward Gold-Backed Finance

The rise of loans against jewellery signals a structural trend:
Indian consumers are increasingly leveraging idle household gold to meet financial needs—without resorting to costlier unsecured borrowing. As banks deepen their gold-loan portfolios with better processes and digital onboarding, this segment is set to remain a high-growth, low-risk driver in the retail credit landscape.