Summary of this article
Gold loans rose 88.1 per cent to Rs 5.52 lakh crore.
Growth slowed as banks adjusted to new gold loan rules.
Housing and vehicle loans also recorded faster annual growth.
Bank loans against gold jewellery grew at the fastest pace among major personal loan categories in July, even as the rate of growth moderated from a year earlier.
According to Reserve Bank of India (RBI) data, outstanding bank gold loans have risen 88.1 per cent year-on-year to Rs 5.52 lakh crore as of July 31. The growth rate was much higher at 136.4 per cent a year earlier.
The slower pace comes as banks adjusted their gold loan practices to a new regulatory framework that came into effect from April 1, 2026.
RBI Rules On Gold Loans
The RBI has introduced a uniform regulatory framework for loans against gold jewellery and other eligible gold collateral from April 1.
One of the key changes relates to the tenure of consumption-focused bullet repayment gold loans. Under the new framework, these loans can have a maximum tenure of 12 months.
The RBI also changed the earlier uniform 75 per cent loan-to-value (LTV) limit to a tiered system based on the size of the loan.
For loans up to Rs 2.5 lakh, lenders can provide up to 85 per cent of the value of the gold as a loan. For loans above Rs 2.5 lakh and up to Rs 5 lakh, the LTV limit is 80 per cent. For loans above Rs 5 lakh, the maximum LTV is 75 per cent.
These changes require lenders to adjust their lending processes, valuation practices and repayment structures.
Housing And Vehicle Loans Pick Up
Gold loans were not the only part of banks' personal loan book to record strong growth. Overall, personal loans grew 16.2 per cent year-on-year in July, compared with 11.9 per cent a year earlier. Housing and vehicle loans were among the categories supporting this growth.
Outstanding housing loans, including priority sector loans, rose 11.3 per cent year-on-year to Rs 34.3 lakh crore by July. The corresponding growth rate a year earlier was 9.6 per cent.
Vehicle loans grew 18.8 per cent to Rs 7.65 lakh crore, compared with 8.9 per cent growth a year earlier.
The bank gold loan data, however, does not fully capture gold-backed agricultural lending. Except for one lender, banks classify such loans under agriculture credit rather than gold loans.
Bank Credit Growth Reaches Rs 220.8 Lakh Crore
Overall bank credit grew 19.3 per cent year-on-year to Rs 220.8 lakh crore at the end of July.
Among the four broad sectors, services recorded the highest credit growth at 22.9 per cent. Credit to industry grew 20 per cent, while credit to agriculture and allied activities rose 17 per cent.
The latest numbers therefore, show strong credit growth across major segments, with gold-backed lending recording the highest growth rate even as its pace moderated from the previous year.
