Indian gold loan market trends and regulations

The gold loan market in India has seen significant activity, driven by both entrepreneurial growth and household financial pressures. Initially, women entrepreneurs have utilized gold loans as a vital source of seed capital to bypass traditional banking bureaucracy and credit history requirements, launching businesses in sectors like technology, healthcare, and sustainable fashion.

However, the rapid expansion of the market has raised concerns regarding household financial resilience. During the 2025-26 fiscal year, gold loan disbursements reached an estimated ₹4.7 trillion. Data suggests that a portion of these borrowers—between 15% and 23%—were already more than 90 days overdue on other outstanding loans, indicating that some households may be pledging jewelry to manage existing debts rather than for productive investments.

These lending activities are governed by Reserve Bank of India regulations updated in April 2026. The current tiered Loan-to-Value (LTV) framework allows borrowers to access up to 85% of a gold's value for loans up to ₹2.5 lakh, 80% for loans between ₹2.5 lakh and ₹5 lakh, and 75% for amounts exceeding ₹5 lakh.