Loan against Gold Jewellery recorded the Fastest Growth
Credit extended to borrowers requesting loans against gold jewellery surged sharply during January 2025 – coinciding with record increases in gold prices – with gold loan portfolio increasing by 76.9 percent compared with 17.4 percent last January according to data released by Reserve Bank of India on February 28, while personal loan growth decelerated.
Last month’s data from RBI’s Sectoral Deployment of Bank Credit showed that outstanding loan against gold jewellery stood at Rs 1.79 lakh crore as of January 24 2025, as opposed to Rs 1.00 lakh crore on January 26, 2024 and Rs 86,133 crore as on January 27 2023, an increase from previous months’ data showing Rs 86.1 billion outstanding on those dates respectively.
Statistics on sectoral deployment for January were collected from 41 scheduled commercial banks, accounting for 95% of non-food credit deployed across these institutions in January.
Loan against gold jewellery saw the fastest annual compounded growth among all components in personal loan segment, but other categories saw declines including “other personal loans”, vehicle loans and credit card outstandings resulting in decelerating personal loan growth by January 2025.
Personal loan growth slowed significantly year over year to 14.2 per cent over the two weeks ended January 24, 2025 versus 18.2 percent a year ago.
As per fortnight ending January 24 2025, bank’s credit growth in other personal loan segments had decreased to 8.7 percent as against 23.1 per cent a year ago; bank credit to education also experienced a reduction to 15.9% as against 23.5 % during same time frame in 2024.
On January 24th 2025, bank credit to credit card outstanding growth stood at 13 percent compared to 31.3 percent during a similar time last year.
Credit for agriculture and related activities saw growth of 12.2 per cent year-on-year as of January 24 2025 versus 20% growth seen last year during this same timeframe.
Credit to industry saw an 8.2 per cent surge as of January 24, 2025 compared with 7.5% year-on-year during its respective fortnight last year, according to data provided. Outstanding loans extended by major industries included petroleum products and nuclear fuels as well as basic metal and metal product, chemicals/chemical products and all engineering showing increased activity, according to figures available from Bloomberg.
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