Gold Loans Jump 83% To ₹5.6 Lakh Crore As Bajaj Finance, Piramal Flag Repayment Stress

Gold loans from Indian banks jumped 83% year-on-year to ₹5.6 lakh crore in August 2026, while loans against gold from non-banking financial companies (NBFCs) rose 69% to ₹3.6 lakh crore, according to Reserve Bank of India data.

The sharp rise is now being accompanied by early signs of repayment stress. Bajaj Finance and Piramal Finance have flagged concerns over repayment behaviour among some gold-loan borrowers, although overall delinquencies in the segment remain low.

Bajaj Finance reported an increase in loans overdue by more than 30 days during the September quarter, with a large part of the rise coming from short-term gold loans. The lender has stopped offering these short-tenure products.

Piramal Finance has separately raised concerns over multiple borrowing and gold loans being given across the industry to customers who have previously faced serious repayment delays.

The developments come as gold loans have become one of the fastest-growing lending segments in India, with banks and NBFCs expanding secured lending against household gold.

Gold Loans Rise Sharply In India

Bajaj Finance had a gold loan portfolio of around ₹24,000 crore in the September quarter. Its Stage 2 and Stage 3 assets, which include loans where credit risk has increased or repayments are overdue, rose 15 basis points sequentially.

The lender said a large part of the increase came from short-term gold loans, which it has now stopped offering.

Piramal Finance has also pointed to risks from borrowers having loans with more than one lender. Around 35% of its customers had a gold loan with another institution, up from around 20-25% two years ago.

The company also said that across the industry, around 15-23% of gold-loan disbursements over the past year went to customers who had been more than 90 days overdue on another loan at least once.

The stress is not yet widespread. Overall delinquencies in gold loans remain low, but the rapid increase in borrowing has put repayment trends under closer watch.

What Gold Loan Repayment Stress Means For Borrowers

The early signs of stress come as higher gold prices have allowed borrowers to raise larger loans against the same amount of jewellery, helping lenders expand their gold-loan books at a rapid pace.

The rise in customers borrowing from more than one lender is now emerging as one of the areas being watched. Piramal Finance said around 35% of its customers had a gold loan with another institution, compared with 20-25% two years earlier.

The lender also pointed to repayment problems elsewhere in the financial system. Around 15-23% of gold-loan disbursements across the industry over the past year were made to customers who had previously been more than 90 days overdue on another loan.

Bajaj Finance has seen similar early warning signs in its short-term gold-loan portfolio. The company stopped offering these loans after they contributed to an increase in overdue accounts during the September quarter.

For borrowers, the risk becomes greater if repayment pressure coincides with a fall in gold prices. Lower gold prices reduce the value of the jewellery held as collateral, while missed repayments can eventually lead to the pledged gold being sold by the lender after the required process is followed.

The numbers do not yet point to widespread stress in gold loans, with overall delinquencies remaining low. However, the combination of rapid loan growth, multiple borrowing and early repayment delays has put the segment under closer watch as lenders continue to expand their gold-loan portfolios.

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