Gold loans in India are rapidly transforming from a stigmatised “last resort” borrowing option into a planned and preferred credit choice, according to Kotak Mahindra Bank. The bank said borrowers are increasingly pledging idle ancestral jewellery to access quick, hassle-free and lower-cost credit compared to mortgages and unsecured loans. Shripad Jadhav, President and Head – Gold Loans at Kotak Mahindra Bank, said this shift reflects changing borrower behaviour. “Gold loans are no longer about distress. Customers with stable incomes are using them as a disciplined way to meet short-term needs and act on time-sensitive opportunities,” he said.
Rising gold prices have significantly increased the value of household jewellery, enabling individuals to meet short- and medium-term financial needs. The bank noted that minimal documentation, faster approvals and flexible repayment options are driving wider adoption. Once concentrated in southern and semi-urban markets, gold loans are now seeing broad-based growth across segments, including salaried professionals, entrepreneurs and HNIs. Ticket sizes ranging between ₹2 lakh and ₹10 lakh are increasingly replacing loans against property and home loan top-ups.
With India’s gold holdings estimated at over $5 trillion—of which nearly 90% remains unmonetised—Kotak said gold lending, currently around ₹15 lakh crore, could soon emerge as a major standalone asset class.