India's Gold Loan Boom: Jewellery Transforms into Smart Financial Asset

• Gold loans are no longer just for small needs; high-net-worth individuals and business owners are increasingly pledging gold for large investments and business expansion.
• Data shows a significant shift: loans above Rs 5 lakh doubled in two years, now accounting for 36.5% of new sanctions, while smaller loans under Rs 1 lakh declined.
• Rising gold prices are a primary driver, allowing borrowers to secure higher amounts with smaller pledges, alongside easier processing and higher loan-to-value ratios.
• Public sector banks hold 46% market share, but NBFCs are rapidly growing due to minimal paperwork and quick approvals, despite slightly higher interest rates.
• Gold loans are India's fastest-growing retail lending segment, with a 44% increase to Rs 16.1 lakh crore, and non-performing loans remain low.