Archive · 22 Dec 2025
RBI Warns on Gold Loans Amid Surge
The Reserve Bank of India (RBI) is worried about the ups and downs in gold prices.
Because of this, banks and other lenders are being more careful with gold loans.
They are now giving smaller loans compared to the value of the gold, which means people can borrow less money for the same amount of gold.
This is happening because gold prices have been going up and down a lot, and the RBI doesn't want banks to take too much risk.
Also, younger people are borrowing more, and the RBI is concerned that this borrowing is for spending rather than investing.
The RBI wants banks to be careful so that people can pay back their loans and banks don't lose money.
Additionally, more money is coming from non-bank sources like corporate bonds and foreign investments, which has increased to 45% from 43%.
RBI has advised banks and NBFCs to exercise caution in the gold loan segment due to rising volatility in gold prices.
LTV ratios for gold loans have been reduced from 70–72% to 60–65% to mitigate risks.
Gold prices have surged 20% in the last three months and 35% in the last six months.
Gold loans have surged 100% year-on-year since March 2025, reaching Rs 3.37 lakh crore in October 2025.
Younger borrowers (aged 31–40) account for 40–45% of gold loans, with concerns over consumption-driven borrowing.
- Who
- Reserve Bank of India (RBI) and Indian banks/NBFCs
- What
- Tightening lending limits on gold loans due to volatility concerns and increased non-bank funding
- When
- Recent months, with significant growth since March 2025
- Where
- India
- Why
- To mitigate risks from gold price fluctuations, borrower demographics, and shifting funding sources
- Current Gold Price
- Rs 1.31 lakh per 10 grams
- Loan Value Growth
- Rs 3.37 lakh crore in October 2025
- Loan Value in April 2024
- Rs 1.01 lakh crore
- Loan Growth Since March 2025
- 100% year-on-year
- Average Loan Ticket Size
- Rs 80,000–1.5 lakh
- Primary Borrower Age Group
- 31–40 years (40–45%)
- Secondary Borrower Age Group
- 21–30 years (doubled since FY21)
- Total Flow of Resources to Commercial Sector
- ₹22,56,691 crore (up to November 28, 2025)
- Bank Credit Share
- 55% (down from 57% a year ago)
- Non-Bank Sources Share
- 45% (up from 43% a year ago)
Sources
RBI flags concerns over rising gold volatility
RBI Gold Loan Guidelines 2025: 10 Big Changes Borrowers And Lenders Must Know
Share of non-bank sources in incremental funding to commercial sector goes up to 45% from 43%
