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Gold-Loan NBFC AUM Seen Crossing Rs 4 Lakh Crore By FY27 On Record Gold Prices: CRISIL
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CRISIL Ratings projects gold-loan NBFC AUM to grow at 40 percent CAGR, surpassing Rs 4.0 lakh crore by March 2027, driven by record gold prices and regulatory support.
Gold-Loan NBFCs Eye Rs 4 Lakh Crore AUM as High Gold Prices Drive Demand
Assets under management (AUM) of non-banking financial companies (NBFCs) specialising in gold loans are expected to grow at a sharp pace over the next two years, driven by record gold prices, rising demand for secured credit and regulatory support.
According to CRISIL Ratings, gold-loan NBFC AUM is set to clock a compound annual growth rate (CAGR) of around 40% between the current fiscal and the next, crossing Rs 4.0 lakh crore by March 2027. This is significantly higher than the 27% CAGR seen between fiscals 2023 and 2025.
High gold prices boost lending capacity
CRISIL Ratings noted that gold prices surged nearly 68% in the first nine months of the current fiscal, touching record highs. This sharp rise has enhanced collateral values, allowing lenders to increase disbursements against the same quantity of gold.
At the same time, limited availability of unsecured credit has pushed borrowers to explore alternative funding sources. Gold loans, backed by physical collateral, have emerged as a preferred option due to quicker processing and easier access.
NBFCs expand footprint despite bank competition
To tap rising demand, both large and mid-sized gold-loan NBFCs are expanding their presence, even as competition from banks intensifies.
“Large gold-loan NBFCs, with an established brand image, are scaling up portfolios through existing branches,” said Aparna Kirubakaran, Director, CRISIL Ratings. She added that mid-sized players are following a dual strategy—expanding branch networks while also acting as loan originators for larger NBFCs and banks.
These efforts have lifted business per branch by around 40% over the last two fiscals. Average AUM per branch stood at about Rs 14 crore in the first half of the current fiscal, compared with around Rs 10 crore in FY24, CRISIL Ratings said.
Regulatory changes to support growth
On the regulatory front, revised loan-to-value (LTV) norms for lower-ticket gold loans, effective April 1, 2026, are expected to provide additional lending headroom.
CRISIL Ratings estimates that LTV for lower-ticket bullet loans could rise from the current 65–68% to around 70–75% after factoring in accrued interest. This will allow borrowers to access higher credit against the same gold collateral, further improving loan attractiveness.
Shift from unsecured to secured credit
Demand is also being driven by a structural shift away from unsecured lending. “Following asset quality issues and stricter regulatory action in unsecured lending, gold loans have emerged as a strong alternative,” said Prashant Mane, Associate Director, CRISIL Ratings.
However, CRISIL cautioned that managing risks—especially LTV discipline, gold price volatility, and operational controls—will be critical for sustainable growth.
January 22, 2026, 16:45 IST
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