In a significant shift in India's lending landscape, gold loan outstanding has dramatically outpaced credit card debt, with the gap now reaching a massive ₹1.6 lakh crore. Data compiled by Zerodha Capital, based on Reserve Bank of India (RBI) figures, reveals that gold loan portfolios have soared to approximately ₹4.6 lakh crore, while credit card dues hover around ₹3 lakh crore.
The Widening Divide in Indian Lending
This divergence represents a 57% lead for gold-backed lending over unsecured credit card debt. The trend, which saw gold loan outstanding first surpass credit card debt in mid-2025, has accelerated sharply over the past year. While credit card outstanding has largely plateaued after years of consistent growth, gold loans have experienced rapid expansion since 2024.
Key Factors Driving the Shift
Several factors are contributing to this notable change in borrowing patterns:
- Rising Gold Prices: The increasing value of gold has allowed borrowers to unlock greater loan amounts against their pledged jewellery, making gold loans more attractive.
- Tighter Regulatory Scrutiny: The RBI has intensified its oversight on unsecured lending, including personal loans and credit cards. This has prompted banks and Non-Banking Financial Companies (NBFCs) to shift their focus towards more secure, collateral-backed lending options like gold loans.
- Increased Demand for Secured Loans: Households and small businesses are increasingly seeking secured financing, viewing gold loans as a quicker and often more accessible alternative to other forms of credit.
The data, which tracks 41 select scheduled commercial banks, illustrates a steep rise in gold loan outstanding from below ₹1 lakh crore in 2021 to over ₹4.5 lakh crore by 2026. Conversely, credit card debt, after climbing steadily until 2017, has largely stabilized around the ₹3 lakh crore mark.
Gold loans are generally perceived as lower-risk for lenders due to the collateral involved and their expedited processing times, making them an increasingly favored option in the current financial environment.