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Gold loans remained the fastest-growing segment in India's retail credit market in the first quarter of FY27, with the outstanding portfolio rising 62 per cent year-on-year to Rs 21.7 lakh crore as of June 2026, according to a report by JM Financial.
The report, noted that gold loans accounted for 12.2 per cent of total retail loans in Q1FY27, compared with 10.9 per cent in March 2026. Describing the trend, JM Financial said gold loans remained the "standout growth engine", with portfolio expansion accelerating amid rising loan ticket sizes and higher gold prices. However, fresh lending activity moderated during the quarter after a sharp surge in the preceding three months. Gold loan disbursements rose 31 per cent year-on-year to Rs 8 lakh crore in Q1FY27, compared with 122 per cent growth in Q4FY26. On a sequential basis, disbursements declined 27 per cent. The number of loans disbursed fell 4 per cent year-on-year to 3.7 crore, reversing the 45 per cent growth recorded in the previous quarter. Meanwhile, the average ticket size increased 37 per cent year-on-year to around Rs 2.17 lakh, although it declined from Rs 2.20 lakh in Q4FY26. The report said growth was "almost entirely value-led", highlighting the role of higher average loan amounts in driving the expansion in disbursements. The shift was also reflected in the distribution of new loans. The share of loans above Rs 5 lakh in the total value of originations declined to 38.2 per cent in Q1FY27 from 41.5 per cent in the previous quarter. In comparison, the share of loans between Rs 1 lakh and Rs 2.5 lakh rose to 24 per cent from 21.7 per cent, while loans between Rs 2.5 lakh and Rs 5 lakh increased to 27.8 per cent from 26.8 per cent. Loans below Rs 1 lakh accounted for 10 per cent of the total value of disbursements but represented 43 per cent of the number of loans issued, compared with 45 per cent in Q4FY26. JM Financial attributed the moderation in larger-ticket lending partly to a recovery in the share of public sector banks in new loan originations. Public sector banks' share of gold loan originations by value rose to around 49.2 per cent in Q1FY27 from 40.1 per cent in Q4FY26. Meanwhile, non-banking financial companies accounted for around 27.8 per cent, down from 38 per cent in the preceding quarter. Within the segment, non-priority sector gold loan disbursements grew 47 per cent year-on-year to Rs 6.5 lakh crore, while priority sector gold loan disbursements declined 10 per cent to Rs 1.6 lakh crore. The report also highlighted that "the share of >INR 0.5mn loans moderated to 38.2% of originations value", indicating a pause in the shift towards larger-ticket loans after four consecutive quarters of growth. Rising gold prices have supported the expansion of gold-backed credit by increasing the collateral value of pledged gold. However, the report's lending figures do not separately quantify the contribution of gold price appreciation to overall portfolio growth. Overall, the Q1FY27 data points to continued strength in outstanding gold-backed credit alongside a moderation in fresh lending volumes and a shift towards mid-sized loans. (ANI)
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