The Gold Loan Market in India is the leading market in the world probably due to large demand of gold by Indians. India is having the largest gold stock in the world, i.e. more than 22,000 Metric Tons of gold held by the domestic households and temples. Gold has always been a valued commodity. It is considered auspicious, and used in the form of jewellery, coins and other assets in India. Due to its high value, people have been taking loans against gold ornaments for centuries.

The organized gold loan market has been grown tremendously over the last two years with significant growth in some of the specialized NBFCS. However, the recent RBI regulations have capped the loan-to-value (LTV) ratios on lending against gold jewellery. On the contrary, the regulation has made the operations more transparent, especially in case of NBFCs to provide opportunities to banks (both public and private) to grow their share in the coming years.

Speculating the growth prospects of Indian Gold Loan Industry, Shushmul Maheshwari, Chief Executive, RNCOS said Since the gold loan market is highly unorganized, the organized segment has a huge potential for growth through cannibalization of the unorganized segment. A bigger, better and more well-organized network of branches would facilitate the organized segment target this growth area. In India, the gold loan market is still under-penetrated considering the plentiful availability of gold as collateral with Indian private households and the accessible size of the gold loan market. This offers a considerable scope for growth of the gold loan market in India.

To tap the growing market, numerous major players such as Muthoot Finance, Muthoot Fincorp, Manappuram Finance Limited etc are continuously innovating and developing their brands to best suit the Indian market. In order to standardize the valuation and make it more transparent to the borrower, Reserve Bank of India has decided that gold jewellery accepted as security/collateral will have to be valued at the average of the closing price of 22 carat gold for the preceding 30 days as quoted by the India Bullion and Jewellers Association Ltd.

With over a decade of experience in providing business solutions/ market research and consultancy, RNCOS acts a growth partner to venture into and understand business environment better by providing solutions in all the business endeavors of our customers, be it product launching, geographic expansion, sales improvement, distributor/retailer tie-ups etc. We help the business prosper by providing our customers with actionable market intelligence and insights by studying the market dynamics, collating with the business and devising the right strategies.

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RNCOS is a leading industry research and consultancy firm incorporated in 2002. As a pioneer in syndicate market research, our vision is to be a global leader in the industry research space by providing research reports and actionable insights to companies across a range of industries such as Healthcare, IT and Telecom and Retail etc. We offer comprehensive industry research studies, bespoke research and consultancy services to Fortune 1000, Trade associations, and Government agencies worldwide.