Gold Loan Stress: Bajaj Finance, Piramal Flag Early Repayment Strain
Image: Business Standard
Two of India’s largest non-bank lenders, Bajaj Finance and Piramal Finance, said on their September-quarter earnings calls that gold loans are showing early signs of repayment stress, Business Standard reported on 21 October. Piramal Finance CEO Jairam Sridharan said 15% to 23% of gold loan disbursements in 2025-26, worth about Rs 4.7 trillion, went to borrowers who were more than 90 days overdue on another loan. “It is a shockingly high number,” he said.
Short-Tenor Gold Loans Stopped at Bajaj Finance
For borrowers, the immediate change is tighter lending. Bajaj Finance, whose gold loan book is about Rs 24,000 crore, stopped offering short-tenor gold loan schemes in August. Its Stage 2 and Stage 3 assets, the loans showing delay or default, rose by Rs 1,601 crore in July-September, of which Rs 1,047 crore came from those schemes. About Rs 550 crore has since moved back to Stage 1. Piramal Finance said borrowers with overdue loans elsewhere were under 1% of its October gold loan disbursements.
Gold Lending Has Nearly Doubled in a Year
RBI data shows bank gold loans grew 83% year on year to about Rs 5.6 trillion by 31 August 2026, and NBFC gold loans grew 69% to about Rs 3.6 trillion. Macquarie Capital’s Suresh Ganapathy put gold loans at roughly 28% of the non-housing retail loan book. Sridharan also said that a gold loan on a borrower’s file “is not an indicator of higher risk” by itself.
The warning follows the central bank’s tighter stance, covered in IPB’s report on the RBI MPC minutes.
Next Quarter’s Numbers Will Show the Trend
Neither lender has given an overall gold loan default rate, so the scale of the stress is unclear. The next test is the December-quarter results, when Stage 2 and Stage 3 figures can be compared with the 15 basis point rise Bajaj Finance reported this quarter. See more in IPB’s Economy section.
Source: Bajaj Finance investor presentation filed with NSE. Also based on reporting by Business Standard and Whalesbook.
Image: Business Standard.
