Archive · 1 Sep 2026
Gold loans set for Rs 30 lakh crore by FY28
Many Indian families own gold jewelry that is not being used.
They can pledge this gold to borrow money, which is called a gold loan.
This type of borrowing has grown quickly and became one of India’s largest retail lending categories.
Motilal Oswal expects the market to grow to more than Rs 30 lakh crore by March 2028.
Public sector banks currently provide much of this lending.
Private banks and other financial companies are entering the business more quickly.
This may make it harder for gold-focused companies such as Muthoot Finance and Manappuram Finance to keep their market share.
The Reserve Bank of India’s rules and concerns about people borrowing repeatedly could also affect the industry.
Motilal Oswal projects India’s gold loan market will reach over Rs 30 lakh crore by March 2028.
The industry loan book stood at Rs 18.6 lakh crore in March 2026 after growing 50% year-on-year in FY26.
Motilal Oswal’s preferred stocks include ICICI Bank, State Bank of India, Kotak Mahindra Bank, AU Small Finance Bank, Bajaj Finance and L&T Finance.
Public sector banks held about 60% of the market in March 2026, while private banks and diversified NBFCs are expanding.
The brokerage expects gold-focused NBFCs Muthoot Finance and Manappuram Finance to lose market share amid competition and tighter oversight.
- Who
- Motilal Oswal, banks, diversified NBFCs and gold-focused NBFCs including Muthoot Finance and Manappuram Finance.
- What
- India’s gold loan market is projected to grow at a 28% CAGR and exceed Rs 30 lakh crore by March 2028.
- When
- The forecast covers FY26 to FY28, with the market measured at Rs 18.6 lakh crore as of March 2026.
- Where
- India.
- Why
- Growth is being driven by higher gold prices, demand from households and businesses, wider lender networks, improving processes and greater acceptance of gold loans.
Growth opportunity
Competitive and regulatory risks
Market expansion
Growth opportunity
Motilal Oswal expects gold loans to grow at a 28% CAGR through FY28, supported by low household penetration, greater acceptance and only about 8% of household gold being monetised through the organised market.
Competitive and regulatory risks
The brokerage says rising competition and tighter Reserve Bank of India oversight could create short-term disruption and put pressure on product margins.
Position of gold-focused NBFCs
Growth opportunity
Muthoot Finance and Manappuram Finance are still expected to grow their gold loan books, at estimated CAGRs of 21% and 27%, respectively, between FY26 and FY28.
Competitive and regulatory risks
Motilal Oswal expects both companies to lose market share to banks and diversified NBFCs, maintaining a Neutral rating on both stocks.
Borrowing demand
Growth opportunity
Higher gold prices and demand from households and businesses are helping borrowers unlock the value of idle gold.
Competitive and regulatory risks
A high level of repeat borrowing could increase the risk of overleveraging, making gold tonnage and new-customer additions important indicators to monitor.
- Projected market size
- More than Rs 30 lakh crore by March 2028
- Expected growth
- 28% CAGR between FY26 and FY28
- Market size in March 2026
- Rs 18.6 lakh crore
- FY26 growth
- 50% year-on-year
- Public-sector bank share
- About 60% of the market, including agricultural gold loans, as of March 2026
- Household gold holdings
- An estimated 28,000 tonnes, with about 8% monetised through the organised gold loan market
- Motilal Oswal’s top picks
- ICICI Bank, State Bank of India, Kotak Mahindra Bank, AU Small Finance Bank, Bajaj Finance and L&T Finance