Mumbai, Public sector banks' dominance in gold loan sourcing is gradually facing pressure as private banks and NBFCs gain traction, according to the report.
This is supported by stronger distribution reach, faster turnaround times and changing customer preferences, according to an Experian report titled 'Gold Loans in Transition: Market Evolution & Consumer Patterns'. "The market structure is gradually shifting toward private and NBFC-led sourcing, highlighting stronger distribution reach, faster turnaround times, and growing customer preference for non-bank lenders in the gold loan segment," the report said.
According to the report, the gold loan market share of public sector banks based on sourcing value stood at 37 per cent in Q4FY26, as against 45 per cent in Q4FY25, and 53 per cent in Q2FY26.
Similarly, shares of NBFCs have increased to 44 per cent in Q4FY26, from 33 per cent in a year ago, and 22 per cent in Q2FY25.
"Among financial institutions, NBFCs have emerged as the fastest-growing lender category, steadily gaining market share over the past few quarters and overtaking public sector banks in sourcing contribution by FY26 Q4.
Public sector banks, although still a significant contributor, have consistently ceded market share, reflecting increasing competitive pressure from agile NBFC lenders," report added.
Further, Public Banks are dominating the Priority Sector Gold Loans (PSGL)market, holding around 88 per cent of market share in Q4FY26 (-2 per cent drop year-on-year) and PSGL contributes around 42 per cent to their gold loan sourcing value in FY26.
Public sector banks continue to lead the market in this domain, leveraging their extensive branch networks and deep rural presence, while private sector banks and small finance banks are also scaling up exposure as part of a broader shift toward low-risk, high-returns secured retail assets, report said.
The shift comes as PSGL gains importance, with the segment increasingly emerging as a growth opportunity for lenders.
"PSGL is increasingly being viewed by lenders as a stable, scalable, and regulation-aligned growth opportunity," the report said.
The report highlighted that PSGL growth is being supported by new customer sourcing across rural, semi-urban and underserved borrower segments, indicating wider financial inclusion opportunities.
"Incremental portfolio growth in the PSGL segment is being supported more by sustained new business generation rather than reliance on portfolio renewals alone," it said.
Experian said gold loans are also moving towards higher-value lending, with growth increasingly driven by rising ticket sizes rather than only expansion in loan volumes.
"Gold Loan growth is increasingly being driven by rising ticket sizes rather than pure volume expansion, reflecting a clear shift toward higher-value lending," the report said.
