look news india
New Delhi: Despite an expected slowdown in growth due to stringent regulations, India's organised gold loan market is projected to double to Rs 14.19 lakh crore in the next five years, a report has predicted.
According to this report released on the country's gold loan market, the organized gold loan market witnessed significant growth in the financial year 2023-24 and reached a value of Rs 7.1 lakh crore. According to this, at an annual growth rate of 14.85 percent in five years, the loan on the gold market is expected to reach Rs 14.19 lakh crore by the financial year 2028-29.
The report said that Indian households hold an estimated 25,000 tonnes of gold. According to the report, the current gold held by Indian households is worth about Rs 126 lakh crore. The gold loan market will see moderate growth in the next two years as lenders providing loans against gold will face scrutiny from regulatory authorities on loan-to-value maintenance and auction-related processes. Additionally, the Reserve Bank's advice to non-banking financial companies on cash disbursements, which limits the cash disbursement amount to Rs 20,000, may force consumers to rely on the unorganized sector.
The regulator has also raised concerns about the evaluation process of lending activities by fintech startups. The increased regulatory scrutiny and revised guidelines have led to a drop in the stock prices of large non-banking financial companies.
Lenders offering gold loans are using this period to ensure they comply with all regulatory guidelines, as well as streamline their middle and back offices through digitalisation initiatives.
