Gold loans soar 122 per cent in Jul to Rs 2.94 tln; overall bank credit rises 9.9 per cent

MUMBAI: The eased regulatory environment, coupled with the rising prices of gold, has led lending against gold jewellery to zoom to Rs 2,94,166 crore in July, a full 122 per cent on-year growth from Rs 1,32,535 crore. In fact, this also shows the rising indebtedness of the households, as typically, gold loans are for consumption and are of a small ticket size. For lenders, this is a fully secured product as it is 115 per cent asset-backed.

This growth comes even as overall bank credit (non-food) inched up just 9.9 per cent in the month to Rs 184.45 trillion, a deceleration from 13.5 per cent a year ago, according to the latest RBI data for the fortnight ending July 26.

According to data, outstanding gold loans were Rs 1,32,535 crore as of July 26, 2024 and Rs 2,08,735 crore as of March 21, 2025, which rose to Rs 2,94,166 crore as of July 25, 2025, a full 122 per cent on year and a 41 per cent so far this fiscal. The industry added Rs 85,431 crore in net outstanding loan so far this fiscal.

The slower growth in non-food credit was largely on account of weaker growth in loans to agriculture and allied activities and industry sectors – 184.45 trillion, up from 182 trillion in March end.

The services sector credit grew 10.6 per cent as against 14.5 per cent a year ago. Loans to NBFCs decelerated to 2.6 per cent from 12.7 per cent, the RBI data showed.