In a surprising turn for the financial sector, loans secured against gold jewellery have emerged as the unexpected powerhouse of Indian retail credit. Recent data reveals an explosive growth trajectory for this traditional form of borrowing, significantly outpacing other credit categories.
Unprecedented Growth in Gold Loans
The latest figures from the Reserve Bank of India are nothing short of staggering. Outstanding balances for gold loans surged by a massive 128.5% year-on-year to reach Rs 3.38 lakh crore in October 2025. This represents an impressive 63.6% growth since March 2025 alone, highlighting the accelerating pace of adoption.
This remarkable expansion has positioned gold loans as a crucial component of the banking sector's personal loan portfolio. Gold loans now constitute nearly one-fourth of the total addition to banks' personal loan books over the past twelve months, demonstrating their significant contribution to the overall credit ecosystem.
The Broader Retail Credit Landscape
While gold loans are stealing the spotlight, personal loans continue to drive India's credit growth engine. Overall personal loans increased by 14% over the year to reach Rs 64.56 lakh crore by the end of October 2025.
The RBI, which published these sectoral deployment statistics on Friday, noted that part of the dramatic jump in gold loans can be attributed to a reclassification exercise conducted by banks in May 2024. This regulatory adjustment shifted agricultural loans secured by jewellery into the retail gold-loan category.
The ongoing personal loan boom continues to rely heavily on secured borrowing. Housing loans maintained steady growth with an strong>11% year-on-year increase to Rs 31.87 lakh crore, while vehicle loans expanded by 12.5% to Rs 6.77 lakh crore. Education loans showed robust growth at 14.7%, reaching Rs 1.49 lakh crore.
In contrast, the unsecured segment of the retail market experienced more modest, single-digit growth. Consumer-durable loans inched up by just 1% to Rs 23,646 crore, while credit-card outstanding balances grew 7.7% to Rs 3.03 lakh crore. Other personal loans registered a 9.9% increase to Rs 16.17 lakh crore.
Bank Credit and Non-Retail Sectors
Retail demand continues to be the primary driver of overall bank credit, which grew by 11.3% year-on-year to Rs 193.9 lakh crore in October 2025. Since March, this represents a 6.3% expansion over seven months. Non-food credit, which encompasses almost all lending activities, increased at a similar pace of 11.1% to Rs 193.2 lakh crore.
Beyond the retail sphere, the services sector remains the dominant force. Lending to services climbed 13% year-on-year to Rs 53.45 lakh crore, powered by substantial gains in computer software (29.4%), shipping (28%), and commercial real estate (14.1%).
Non-Banking Financial Companies (NBFCs) continue to attract significant bank exposure, which rose by 10.9% to Rs 17.04 lakh crore. Public financial institutions demonstrated faster expansion compared to housing finance companies within this segment.
Industry credit overall grew by 10% year-on-year to Rs 41.93 lakh crore, with micro and small enterprises leading the charge. Lending to these smaller firms jumped by 25.9% to Rs 9.54 lakh crore, while credit to medium enterprises rose 17.6% to Rs 3.98 lakh crore. Large corporations saw more modest growth of just 4.6% to Rs 28.41 lakh crore.
This pattern reflects the constrained credit appetite in the lower tiers of the corporate pyramid, as top-tier corporations increasingly turn to bonds, equities, and external commercial borrowings for funding—options not captured in bank lending statistics.
Lending to agriculture and allied activities remained steadier, posting an 8.9% increase to Rs 24.03 lakh crore. Within priority sectors, renewable energy lending surged by 52.1%, priority housing by 32.7%, and micro and small enterprises by 25.8%. However, social-infrastructure lending contracted, and export credit also saw a decline.
