Gold Loan Market Shift: Banks Overtake NBFCs with Lower Rates & Rapid Growth

• Banks are rapidly increasing their share in India's gold loan market, challenging the long-standing dominance of NBFCs.
• NBFCs' share dropped from 69.4% in 2020 to 50.3% by March 2025, while banks' share surged from 30.6% to 49.7%.
• RBI's reclassification of agricultural gold loans and aggressive marketing by banks contributed to this growth.
• The volume of gold loans more than doubled in a year, from Rs. 1.59 lakh crore in Nov 2024 to Rs. 3.5 lakh crore by Nov 2025.
• Rising gold prices (68% increase in 2025) and gold loans being a secured option are driving banks' focus on this segment.

Why It Matters: Banks are now dominating the gold loan market due to lower interest rates, RBI changes, and secured nature.