NBFC Gold Loans Surge Nearly 70% in June Despite Tighter RBI Regulations
Non-banking financial company (NBFC) lending against gold jewellery maintained rapid momentum in June 2026, expanding nearly 70% year-on-year, according to recent sectoral data released by the Reserve Bank of India (RBI). The robust uptake demonstrates sustained borrower appetite for gold-backed credit, even in the wake of tighter supervisory directions issued by the central bank.
What Happened
Data from the Reserve Bank of India shows that outstanding NBFC loans secured against gold jewellery increased by 69.3% year-on-year to Rs 3.41 lakh crore at the end of June 2026. This performance followed an expansion of 69.9% recorded in May.
The growth rate for gold-backed loans was more than three times higher than the expansion seen across NBFCs’ total retail credit portfolio. Overall NBFC retail credit climbed 20.3% year-on-year to reach approximately Rs 25.62 lakh crore in June 2026, compared with Rs 21.29 lakh crore in June 2025 and an annual growth rate of 14.3% in the prior period.
Key Highlights
- Outstanding Gold Credit: Total NBFC advances against gold jewellery reached Rs 3.41 lakh crore, marking a 69.3% year-on-year increase.
- Retail Segment Growth: Housing credit expanded 11.4% to roughly Rs 8.44 lakh crore, vehicle loans rose 15.2% to around Rs 6.24 lakh crore, and consumer durable financing surged 46.8% to Rs 72,201 crore.
- Other Economic Sectors: Credit to industry decelerated to 6.7% from 10.3% a year earlier due to lower infrastructure lending growth. Services credit eased to 17.6% from 22.4%, while agricultural credit accelerated sharply to 17.9% from 5.1%.
- Data Coverage: The provisional sectoral figures from the RBI cover Upper and Middle Layer NBFCs as well as housing finance companies, which together represent about 87% of total credit in the reference data.
Why This Matters
The continuous growth in gold-backed loans occurs against a backdrop of increased regulatory scrutiny. In June 2025, the central bank issued the RBI (Lending Against Gold and Silver Collateral) Directions, 2025, introducing a harmonised framework for regulated entities.
This framework addressed supervisory deficiencies flagged by the RBI in September 2024. The regulator’s concerns highlighted issues such as weaknesses in third-party sourcing and appraisal, deficiencies in due diligence, gaps in tracking loan-to-value (LTV) limits, and lack of transparency during auctions of pledged jewellery following borrower defaults. Although lenders were instructed to closely supervise their gold loan portfolios, credit demand in the category has remained exceptionally strong compared to broader industrial and services credit.
What to Watch Next
Market observers and regulated entities will monitor whether NBFC gold loan portfolios sustain this rate of expansion while adhering to the central bank’s harmonised compliance and valuation guidelines.
Frequently Asked Questions
What was the total value of NBFC gold loans in June 2026?
According to RBI data, outstanding NBFC loans against gold jewellery stood at Rs 3.41 lakh crore at the end of June 2026.
How did gold loan growth compare to overall retail credit?
Gold-backed loans grew by 69.3% year-on-year, which is more than three times the 20.3% annual growth rate recorded for the broader NBFC retail loan book.
What regulatory actions did the RBI take regarding gold loans?
Following supervisory concerns in September 2024 regarding appraisal practices, due diligence, loan-to-value monitoring, and auction transparency, the RBI issued harmonised directions for lending against gold and silver collateral in June 2025.
Source: timesofindia.indiatimes.com via ANI and RBI sectoral data.