Lok Sabha Question No. 4021 (UNSTARRED), answered on 2025-08-18
Subject: Increase in Gold Loan NPA
Ministry: FINANCE
Asked by: Shri Rahul Gandhi

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA

## UNSTARRED QUESTION NO. 4021 ANSWERED ON MONDAY, AUGUST 18, 2025/ SRAVANA 27, 1947 (SAKA) INCREASE IN GOLD LOAN NPA

## 4021.  SHRI RAHUL GANDHI:

Will the Minister of FINANCE be pleased to state:

- (a) the size of the gold loan market in the country and the details of gold loans advanced by Scheduled Commercial Banks (SCBs) and Non- Banking Financial Companies (NBFCs) since 2016, year- wise;
- (b) the details of gold loans advanced since January, 2024, month- wise;
- (c) the details of outstanding gold loans, defaults, and gold loan NPAs since 2016, year- wise;
- (d) whether there has been an increase in gold loan NPAs and if so, the reasons therefor;
- (e) the details of gold auctioned by SCBs and NBFCs since 2016; and
- (f) whether  the  Government  has  received  any  complaints  regarding  unethical  practices  by  lenders, including auction of gold without the knowledge of borrowers and if so, the details thereof?

## ANSWER

## THE MINISTER OF STATE FOR FINANCE (SHRI PANKAJ CHAUDHARY)

(a) to (f): As per the Reserve Bank of India (RBI), data on advances outstanding and Gross Non-Performing Assets (GNPAs) in respect of gold loans, including quarterly data since March 2024, as reported by Upperand Middle-Layer Non-Banking Financial Companies (NBFCs) for the past five years is at Annex-I, and by Scheduled Commercial Banks (SCBs) for the past three years is at Annex-II. Gold loan data of SCBs prior to March 31, 2023, and of NBFCs prior to March 31, 2021, is not available with RBI.

Further, in accordance with extant guidelines, banks and NBFCs undertake various measures to mitigate the risks involved in gold loans. These measures, inter alia , include:

- (i) Assessment and re-assessment of the gold offered as collateral at regular intervals to ensure purity by methods such as acid tests, touchstone testing, and X-ray fluorescence (XRF) analysis.
- (ii) Empanelment of trained and skilled appraisers to assess the value of gold pledged.
- (iii) Valuation of pledged gold under CCTV surveillance in the presence of branch officials and the borrower.
- (iv) Periodic audits to ensure adherence to regulatory guidelines and internal policies.
- (v) Auction of pledged gold in case of default, with prior advance notice to customers providing them sufficient time to clear their liability.

Further, the Government and RBI have taken additional steps to safeguard the gold loan portfolio and reduce risks such as gold price fluctuations, valuation errors, and loan defaults. These include, inter alia :

- (i) The  Department  of  Financial  Services  (DFS),  vide  communication  dated  27.02.2024,  advised Public Sector Banks to conduct a comprehensive review of their gold loan portfolios sanctioned/disbursed during 1.1.2022 to 31.1.2024, covering assessment and assaying of collateral, analysis  of  interest  and  other  charges  collected  from  borrowers,  etc.,  to  ensure  adherence  to regulatory requirements and internal policies.
- (ii) On 30.09.2024,  RBI  advised  all  supervised  entities  to  comprehensively  review  their  gold  loan policies, processes, and practices to identify gaps and initiate remedial measures in a time-bound manner, closely  monitor  the  gold  loan  portfolio,  and  ensure  adequate  controls  over  outsourced activities and third-party service providers.
- (iii) To safeguard lenders against risks such as gold price fluctuations and valuation errors, as per extant RBI instructions, regulated entities including banks and NBFCs are not permitted to extend loans exceeding 75% of the value of gold ornaments and jewellery. This Loan-to-Value (LTV) ratio of 75% is required to be maintained throughout the tenure of the loan.
- (iv) For loans where both interest and principal are payable at maturity (bullet repayment loans), banks are not permitted to extend loans with a tenure exceeding 12 months from the date of sanction, to mitigate the risk of defaults.

The  ratio  of  Gross  Non-Performing  Assets  in  gold  loans  to  the  outstanding  gold  loans  for  SCBs  has increased marginally from 0.20% in March 2023 to 0.22% in March 2025, while for Upper- and MiddleLayer NBFCs it has increased from 1.21% to 2.14% over the same period. RBI has further informed that the data related to gold loan auctioned by SCBs and NBFCs is not maintained with it.

The Office of the RBI Ombudsman has received 188 complaints related to gold loans during the financial year  2024-25.  These  complaints  are  handled  in  accordance  with  the  provisions  of  the  RBI  Integrated Ombudsman Scheme, 2021.

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## Lok Sabha Unstarred question no. 4021, regarding Increase in Gold Loan NPA Gold Loan Portfolio of NBFCs (ML & UL)

## Annex-1

Amount in ₹ Crores

|                   | Advances to Individuals against Gold          | Advances to Individuals against Gold          | Advances to Individuals against Gold          | Advances to Individuals against Gold          | Advances to Individuals against Gold          | Advances to Individuals against Gold          | Advances to Individuals against Gold          | Advances to Individuals against Gold          | Advances to Individuals against Gold   | Advances to Individuals against Gold   | Advances to Individuals against Gold   | Advances to Individuals against Gold   | Advances to Individuals against Gold   | Advances to Individuals against Gold   | Advances to Individuals against Gold   | Advances to Individuals against Gold   |
|-------------------|-----------------------------------------------|-----------------------------------------------|-----------------------------------------------|-----------------------------------------------|-----------------------------------------------|-----------------------------------------------|-----------------------------------------------|-----------------------------------------------|----------------------------------------|----------------------------------------|----------------------------------------|----------------------------------------|----------------------------------------|----------------------------------------|----------------------------------------|----------------------------------------|
|                   | Total Advances (Outstanding) - Funded (As on) | Total Advances (Outstanding) - Funded (As on) | Total Advances (Outstanding) - Funded (As on) | Total Advances (Outstanding) - Funded (As on) | Total Advances (Outstanding) - Funded (As on) | Total Advances (Outstanding) - Funded (As on) | Total Advances (Outstanding) - Funded (As on) | Total Advances (Outstanding) - Funded (As on) | Gross NPAs (As on)                     | Gross NPAs (As on)                     | Gross NPAs (As on)                     | Gross NPAs (As on)                     | Gross NPAs (As on)                     | Gross NPAs (As on)                     | Gross NPAs (As on)                     | Gross NPAs (As on)                     |
|                   | 31-03- 2021                                   | 31-03- 2022                                   | 31-03- 2023                                   | 31-03- 2024                                   | 30-6- 2024                                    | 30-9- 2024                                    | 31-12- 2024                                   | 31-03- 2025                                   | 31-03- 2021                            | 31-03- 2022                            | 31-03- 2023                            | 31-03- 2024                            | 30-6- 2024                             | 30-9- 2024                             | 31-12- 2024                            | 31-03- 2025                            |
| NBFCs (ML and UL) | 1,12,42 8                                     | 1,18,971                                      | 1,29,787                                      | 1,54,315                                      | 1,64,4 41                                     | 1,73,6 47                                     | 1,89,0 85                                     | 2,08,4 81                                     | 1,365                                  | 2,749                                  | 3,021                                  | 3,634                                  | 4,250                                  | 4,731                                  | 4,783                                  | 4,470                                  |

Note: The information given is for NBFCs in Middle and Upper Layer as on 31.12.2024

## Lok Sabha Unstarred question no. 4021, regarding Increase in Gold Loan NPA

## Data of Scheduled Commercial Banks (Excluding RRBs and payments bank)

Annex-2

Amount in ₹ Crores

|                                                              | Advances to Individuals against Gold          | Advances to Individuals against Gold          | Advances to Individuals against Gold          | Advances to Individuals against Gold          | Advances to Individuals against Gold          | Advances to Individuals against Gold          | Advances to Individuals against Gold   | Advances to Individuals against Gold   | Advances to Individuals against Gold   | Advances to Individuals against Gold   | Advances to Individuals against Gold   | Advances to Individuals against Gold   |
|--------------------------------------------------------------|-----------------------------------------------|-----------------------------------------------|-----------------------------------------------|-----------------------------------------------|-----------------------------------------------|-----------------------------------------------|----------------------------------------|----------------------------------------|----------------------------------------|----------------------------------------|----------------------------------------|----------------------------------------|
|                                                              | Total Advances (Outstanding) - Funded (As on) | Total Advances (Outstanding) - Funded (As on) | Total Advances (Outstanding) - Funded (As on) | Total Advances (Outstanding) - Funded (As on) | Total Advances (Outstanding) - Funded (As on) | Total Advances (Outstanding) - Funded (As on) | Gross NPAs (As on)                     | Gross NPAs (As on)                     | Gross NPAs (As on)                     | Gross NPAs (As on)                     | Gross NPAs (As on)                     | Gross NPAs (As on)                     |
|                                                              | 31-3- 2023                                    | 31-3- 2024                                    | 30-6-2024                                     | 30-9-2024                                     | 31-12- 2024                                   | 31-3-2025                                     | 31-3-2023                              | 31-3-2024                              | 30-6-2024                              | 30-9-2024                              | 31-12-2024                             | 31-03-2025                             |
| Scheduled Commercial Banks (Excluding RRBs and payments bank | 6,15,34 1                                     | 7,73,2 48                                     | 8,19,334                                      | 8,78,626                                      | 9,23,63 6                                     | 9,83,716                                      | 1,217                                  | 1,513                                  | 1,832                                  | 1,928                                  | 2,040                                  | 2,162                                  |