3 weeks ago
Southern States Dominate India's Gold Loans with 80% Share
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.
Five southern states—Tamil Nadu, Andhra Pradesh, Karnataka, Telangana and Kerala—account for over 80% of gold loan outstanding at public sector banks as on March 31, 2026.
Total gold loan outstanding for public sector banks stood at over ₹11.31 lakh crore, with Tamil Nadu leading at over ₹4 lakh crore.
The data was presented in a written answer in the Lok Sabha by Minister of State for Finance Pankaj Chaudhary.
RBI attributed rapid gold loan growth to rising gold prices, while loan-to-value ratios declined, strengthening collateral buffers.
Gold loan GNPA ratios fell—for scheduled commercial banks to 0.12% from 0.19% and for NBFCs to 0.81% from 2.32%.
- Who
- Public sector banks, the Reserve Bank of India (RBI), and Minister of State for Finance Pankaj Chaudhary, who presented the data in the Lok Sabha.
- What
- A Lok Sabha reply revealed that five southern states hold over 80% of gold loan outstanding, with total public sector bank gold loans at over ₹11.31 lakh crore and declining NPAs.
- Where
- India, particularly the southern states of Tamil Nadu, Andhra Pradesh, Karnataka, Telangana and Kerala.
- When
- Data as on March 31, 2026; presented in the Lok Sabha on Monday and published on August 10, 2026.
- Why
- Rapid gold loan growth has been supported by rising gold prices, and such loans promote financial inclusion by bringing rural, MSME and underserved borrowers into formal lending.
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









