New Delhi, March 26, 2026.
Kotak Mahindra Bank said today that gold loans in India are moving from a stigmatised “last‑resort” product to a planned credit option. Borrowers are increasingly pledging idle ancestral jewellery to access hassle‑free, faster and lower‑cost credit compared with mortgages and unsecured lending, the Bank said.
“This marks a clear behavioural shift,” said Shripad Jadhav, President and Head – Gold Loans, Kotak Mahindra Bank. “Gold loans are no longer about distress. Customers with stable incomes and assets are pledging gold temporarily to unlock credit to act on time‑sensitive opportunities. It’s a disciplined way to bridge short‑term needs.”
With the sharp rise in gold prices, the value of household gold jewellery has increased materially, enabling households to meet short‑ and medium‑term financial needs through gold loans to pursue emerging, time‑sensitive opportunities.
“This behaviour reflects the wider convenience‑credit trend seen among retail borrowers, as gold loans do require minimal documentation,” Jadhav added.
First choice and broader acceptability
Kotak pointed out that gold‑loan customer profiles have widened sharply as acceptance of gold loans has increased. A product once used primarily by a limited section of society has found wider adoption. Salaried professionals, entrepreneurs and HNIs seeking speed, flexibility, convenience and cost‑effective credit for business expansion, education, property investment and other needs are increasingly using gold loans.
“The cost and time advantage is evident,” Jadhav said. “Interest rates on gold loans are typically lower than unsecured credit, approvals are faster and repayment is flexible. For a planned use case, it’s simply the smarter instrument. Customers pledge, use, repay—and take their jewellery back.”
Rising ticket sizes
Historically concentrated in southern states and semi‑urban markets, gold‑loan growth is now broad‑based, with ticket sizes in the ₹2–10 lakh range increasingly substituting loans against property or home‑loan top‑ups where speed and flexibility matter. Customers are choosing to ‘pledge, not liquidate’ their gold assets, which continue to appreciate even while pledged.
“Time value has become critical,” Jadhav added. “When business families, MSMEs and HNIs have 48–72 hours to seize an opportunity, a gold loan that is processed in minutes fits well.”
Why gold loans could become a major asset class
India’s domestic gold holdings are valued at over $5 trillion, much of it being ancestral jewellery that’s sitting idle in lockers; approximately 90% remains unmonetized. With organised gold loans already around ₹15 lakh crore, outpacing loans against property and now sitting just behind housing among secured retail categories, Kotak expects gold lending to emerge as a major standalone asset class over the next few years.
“‘Pledge, don’t liquidate’ has become a simple rule for financially savvy households,” Jadhav said. “Gold loans are now a transparent and efficient way to fund opportunity without compromising long‑term wealth.”
