Gold-backed loans surge nearly 94% YoY, powering bank credit growth in Q1
Gold-secured lending jumped 93.8% year-on-year in Q1 FY27, adding Rs 74,171 crore and lifting total bank credit by 18.6% to over Rs 219 lakh crore.
In the first quarter of FY27, gold-backed loans surged 93.8% from a year earlier, with banks extending Rs 74,171 crore and pushing the gold-loan book to Rs 5.4 lakh crore. This segment supplied 13.1% of the Rs 5 lakh crore rise in non-food credit, helping total non-food credit climb to Rs 219.4 lakh crore and overall bank credit to increase 18.6% YoY to Rs 219.3 lakh crore. Industry credit grew 19.2%, the strongest first-quarter pace in recent years, driven by large industries (up 16.6%) and medium enterprises (up 30%).
Petroleum, power and engineering each added roughly Rs 25,000 crore, together representing 41% of new credit. Personal loans expanded 15.8%, with vehicle financing up 17.3% and gold-jewellery loans leading personal-loan growth at 93.1% YoY. NBFCs saw a 22.8% rise in credit, contributing the largest share of the quarter’s incremental lending.
Why it matters
The boom in gold-secured loans is fueling a broad credit expansion, affecting borrowers, banks and the wider economy.
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