MUMBAI: The eased regulatory environment, coupled with the rising prices of gold, has led lending against gold jewellery to zoom to Rs 2,94,166 crore in July, a full 122 per cent on-year growth from Rs 1,32,535 crore. In fact, this also shows the rising indebtedness of the households, as typically, gold loans are for consumption and are of a small ticket size. For lenders, this is a fully secured product as it is 115 per cent asset-backed.
This growth comes even as overall bank credit (non-food) inched up just 9.9 per cent in the month to Rs 184.45 trillion, a deceleration from 13.5 per cent a year ago, according to the latest RBI data for the fortnight ending July 26.
According to data, outstanding gold loans were Rs 1,32,535 crore as of July 26, 2024 and Rs 2,08,735 crore as of March 21, 2025, which rose to Rs 2,94,166 crore as of July 25, 2025, a full 122 per cent on year and a 41 per cent so far this fiscal. The industry added Rs 85,431 crore in net outstanding loan so far this fiscal.
The slower growth in non-food credit was largely on account of weaker growth in loans to agriculture and allied activities and industry sectors - 184.45 trillion, up from 182 trillion in March end.
The services sector credit grew 10.6 per cent as against 14.5 per cent a year ago. Loans to NBFCs decelerated to 2.6 per cent from 12.7 per cent, the RBI data showed.
Personal loans growth decelerated on-year to 11.9 per cent to Rs 15.36 trillion, from 14 per cent a year ago, largely due to moderation in growth of other personal loans (8.1 per cent vs 12.7 per cent), vehicle loans (8.9 per cent to Rs 6.45 trillion vs 14.6 per cent). On the other hand, housing loans grew 9.6 per cent to Rs 30.81 trillion in the reporting month, compared to a growth of 12.8 per cent in the year-ago period.
Total growth in credit card outstanding declined to 5.6 per cent to Rs 2.91 trillion as of July 25, as against a growth of 22 per cent in the year-ago period.
In July, advances to agriculture and allied activities grew 7.3 per cent to Rs 23.14 trillion, more than halving from 18.1 per cent or Rs 22.87 trillion during the same period a year ago.
Growth in credit to industry moderated to 6 per cent to Rs 39.38 trillion from 10.2 per cent in July 2024. Credit to micro and small, and medium industries continued to grow at a robust pace of 21 per cent and 14.7 per cent, respectively.
Among major industries, outstanding credit to all engineering, vehicles, vehicle parts and transport equipment, rubber, plastic and their products and gems & jewellery recorded healthy on-year growth.