Gold loan boom in India brings first stress signals for non-bank lenders
Bajaj Finance and Piramal Finance report rising repayment problems in gold loans as gold prices retreat, according to Moody's.
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what happened
According to Moody's, India's gold loan market, after two years of rapid growth, is showing early signs of strain. Gold prices are falling while households take on more debt, and several leading non-bank lenders report first repayment problems.
In the September quarter, Bajaj Finance saw its stage-2 and stage-3 assets rise by Rs 1,601 crore, of which Rs 1,047 crore came from gold loans. The company has stopped short-tenure gold loans and is moving to longer terms. Piramal Finance said 15–23% of gold loan disbursements over the past year went to borrowers who had been more than 90 days past due at least once.
RBI data showed that as of end-August, NBFC loans against jewellery rose 69% year on year to Rs 3.64 trillion, while bank loans rose 83% to Rs 5.59 trillion.
why it matters
The gold collateral link matters for markets: lower gold prices shrink the value of pledged assets and could force lenders to cut exposure quickly. Fitch analysts expect credit costs to stay limited, but rising delinquencies could bring higher provisioning and collateral auctions.
market impact
Indian non-bank lenders: rising gold loan delinquencies pressure asset quality across the sector
tags
instruments
sources
- Gold loan boom brings early stress signals for NBFCs — Moody's, 21 October 2026 at 19:50 UTC
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