3 weeks ago

Southern States Dominate India's Gold Loans with 80% Share

Southern States Dominate India's Gold Loans with 80% Share
5 States, led by Tamil Nadu, accounts for over 80% of gold loan, reveals PSB data · thehindubusinessline.com

Many people in India borrow money from banks by giving their gold jewellery as a guarantee.

If they cannot pay back, the bank keeps the gold.

A new government report shows that people in five southern states—Tamil Nadu, Andhra Pradesh, Karnataka, Telangana and Kerala—borrow the most money this way.

Together, they are responsible for more than 80% of all gold loans taken from public sector banks.

The total amount of gold loans in these banks is more than 11 lakh crore rupees.

Tamil Nadu has the highest amount of gold loans.

The reason loans are growing fast is that gold prices have gone up, so the gold is worth more.

The report also says that fewer people are failing to repay their gold loans now than before.

The central bank, RBI, has made rules to protect borrowers, like telling them before selling their gold and giving back any extra money.

Gold loans help people who do not have bank accounts get credit in a safe way.

Key facts

Data as on
March 31, 2026
Total PSB gold loan outstanding
Over ₹11.31 lakh crore
Southern states' combined share
Over 80%
Top state
Tamil Nadu (over ₹4 lakh crore)
SCB gold loan GNPA ratio
0.12% (down from 0.19%)
NBFC gold loan GNPA ratio
0.81% (down from 2.32%)
RBI reserve price rule
At least 90% of current collateral value

Quotes

Pankaj Chaudhary, Minister of State in Finance Ministry

Indian Minister of State for Finance

“"The regulatory framework also requires upfront disclosure of charges, standardized documentation and compensation for delays in the release of pledged collateral, thereby strengthening consumer protection and ensuring fair treatment of borrowers."”
thehindubusinessline.com
“"RBI has informed that, as noted in the Financial Stability Report (FSR), June 2026, the rapid growth in gold loans has been supported by rising gold prices."”
thehindubusinessline.com

Sources

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