Indian Lenders Flag Gold Loan Stress
Major Indian non-bank lenders Bajaj Finance and Piramal Finance report early signs of stress in their rapidly growing gold loan portfolios. While delinquencies remain low, rising overdues prompt cautious tracking across the industry.
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BAJAJ FINANCE LTD and Piramal Finance flagged early stress in Gold loans during their recent earnings updates, signaling potential vulnerabilities in India's fastest-growing retail credit sector.
Bank loans against gold rose 83% on-year to 5.6 trillion rupees in August, while non-bank lenders saw a 69% surge to 3.6 trillion rupees, according to central bank data. Lenders have aggressively expanded gold-backed portfolios, viewing them as secure collateral amid rising retail credit demand.
