Pace of gold loan expansion slows as banks adjust to new regulations

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Gold loans expanded 88.1% year-on-year to Rs 5.52 lakh crore according to data released by Reserve Bank of India up to July 31, as compared with 136.4% rate seen a year back.
The outstanding gold loans of banks do not reflect gold-backed agriculture loans as banks except one classify such loans under agriculture loans instead of gold loans.
Banks' personal loan segment as a whole grew 16.2% year-on-year, as compared with the 11.9% rate seen a year prior, backed by pick-up in the housing loans and vehicle loans.
The RBI implemented a uniform gold loan framework effective April 1, 2026, which restricted the tenure for consumption-focused bullet repayment loans to a maximum of 12 months. The regulator also replaced the uniform 75% loan to value (LTV) ratio rule with a tiered system based on loan size: up to 85% LTV for loans under Rs 2.5 lakh, 80% LTV for Rs 2.5 lakh to Rs 5 lakh, and 75% LTV for amounts above Rs 5 lakh.
The housing loans including the priority sector loans rose 11.3% year-on-year to Rs 34.3 lakh crore while the vehicle loans 18.8% to Rs 7.65 lakh crore at the end of July. The growth rates for banks' housing loans and vehicle loans were at 9.6% and 8.9% respectively a year back.
Overall, bank credit grew 19.3% year-on-year to Rs 220.8 lakh crore at the end of July. Among the four broad sectors, credit to services sector registered the highest growth rate at 22.9% while credit to industry grew by 20% and credit to agriculture and allied activities registered a 17% growth, RBI said.
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document fetched 2026-09-01 02:50