Gold financing stocks were in focus on Monday, with Muthoot Finance rising 0.98% to ₹3,597.30, Manappuram Finance gaining 1.86% to ₹271.55, and IIFL Finance advancing 2.15% to ₹458.10 — all outperforming the broader market. The catalyst was a fresh note from global brokerage Macquarie, which flagged that gold loan growth in India is now running at more than twice the growth rate of personal loans over the last two years, and warned that if this pace continues, there could be a fresh round of regulatory restrictions from the RBI.
The warning is not without precedent — and the data behind it is staggering.
Gold loans: India’s fastest-growing retail credit segment
According to TransUnion CIBIL’s Gold Loan Landscape Report published this month, the gold loan portfolio has expanded 3.8 times since March 2022, making it one of the fastest-growing segments in retail lending. The surge has pushed gold loans to become the second-largest component of India’s retail credit portfolio after housing loans.
Gold loans have now surpassed personal loans in India’s retail credit with a ₹16.2 trillion portfolio in Q3FY26, trailing only housing loans. RBI data shows credit extended against gold jewellery increased nearly 127.6% year-on-year in December 2025 to ₹3.82 trillion. The actual size including NBFCs is estimated to be far larger — the total gold loan market in India is estimated at ₹14 trillion, with NBFCs accounting for 45–50% of volume, which is not fully captured in RBI data.
A key highlight of this growth is the sharp increase in borrower leverage — the average outstanding per borrower has risen from ₹1.9 lakh to ₹3.1 lakh, while the average ticket size has more than doubled to nearly ₹2 lakh. Borrowers are not only opting for gold loans more frequently but are also taking larger loans against their pledged gold.
Gold prices have been the jet fuel
The explosive growth in gold loan volumes is inseparable from the equally explosive rise in gold prices. Gold prices have risen nearly 80% year-on-year as of February 2026 — and with gold now trading above ₹90,000 per 10 grams driven by the ongoing US-Iran war and global safe-haven demand, the collateral value of pledged gold has surged dramatically. This means the same quantity of gold can now unlock significantly more loan value, inflating portfolio sizes even without new borrowers entering the system.
Higher gold valuations mean the average gold loan amount has risen 1.8 times purely due to higher gold values. For lenders like Muthoot, Manappuram and IIFL Finance, this has been a double tailwind — more borrowers drawn in by the credit accessibility of gold-backed lending, and larger loan sizes per borrower.
Why Macquarie is sounding the alarm
The brokerage’s concern mirrors the trajectory that preceded the RBI’s earlier intervention in unsecured personal loans in late 2023. When personal loan and microfinance growth ran too hot, the RBI tightened risk weights, slowed disbursements and triggered a sector-wide correction. Macquarie’s thesis is straightforward — gold loan growth running at more than 2x the pace of personal loans for two consecutive years is exactly the kind of acceleration that historically draws regulatory attention in India.
The RBI has already moved once. Effective April 1, 2026, the RBI introduced new tiered Loan-to-Value norms — loans up to ₹2.5 lakh are eligible for up to 85% LTV, those between ₹2.5–5 lakh for up to 80%, and loans above ₹5 lakh are capped at 75%. Bullet gold loans must now be fully repaid within 12 months. Lenders are increasingly expected to evaluate total borrower exposure, not just the value of pledged gold.
But Macquarie’s note suggests these measures may not be sufficient if growth continues at the current velocity. A second round of restrictions — potentially tighter LTV caps, stricter end-use monitoring, or higher risk weight requirements for gold loan NBFCs — could weigh on the loan books and margins of Muthoot, Manappuram and IIFL Finance, all of which are heavily concentrated in gold lending.
The bull and bear case for gold financiers
The bull case is compelling — global investors are also taking notice, with Bain Capital receiving RBI approval to acquire up to 41.7% stake in Manappuram Finance , signalling international confidence in India’s gold loan sector. The organised gold loan market is forecast to reach ₹14.19 lakh crore by FY2029.
The bear case is regulatory risk. Gold financiers are priced for growth — and any fresh RBI intervention that slows disbursement velocity or tightens LTV ratios could dent near-term earnings meaningfully. Macquarie’s note is a timely reminder that in India’s financial sector, what grows fastest often draws the regulator’s gaze next.
For now, the stocks are rallying on the momentum. Whether the music continues depends on what the RBI sees in the next few quarters of data.