Rising gold prices lead to significant expansion in gold loans: Market Report

Supported by strong growth in gold loans amid a sharp increase in global gold prices, India’s Credit Market Indicator (CMI) rose in the December 2025 quarter both year-over-year (YoY) and quarter-over-quarter (QoQ) according to TransUnion CIBIL’s March 2026 Credit Market Report.

However, retail credit supply normalised in the post-festive period, easing from the momentum created by the rationalisation of Goods and Services Tax (GST) and returning to end of 2024 levels, indicating a seasonal moderation in short-term demand.

The report indicates that the Consumer Credit Market Indicator (CMI) increased to 102 for the quarter ended December 2025, up from 97 in the year ago period.

The December 2025 CMI is also higher by two points from 100 in the preceding quarter of September 2025. The December 2025 quarter CMI marked the third consecutive quarter of improvement.

The CMI is a comprehensive measure of data elements that are summarised monthly to analyse changes in credit market health, categorised under four pillars: demand, supply, consumer behaviour, and performance. 

These factors are combined into a single, comprehensive CMI indicator, and can also be viewed in more detail individually. A higher CMI reading indicates improving credit market health, whereas a lower reading indicates a decline.

“There is evidence of a shift in retail credit growth dynamics, with momentum extending beyond secured products such as gold loans to rising consumption demand from first-time and younger borrowers,” said Bhavesh Jain, MD and CEO, TransUnion CIBIL.

“On the supply side, gold loans have now become the number one product in terms of new originations. Even at the stock level, because of the sheer growth in gold loan originations, gold loans have become the second-largest retail credit book in the country,” he said.

“To give some context, the home loan book is about ₹44 lakh crore, while the gold loan book has now reached ₹16 lakh crore. That makes gold loans the second-largest retail credit book in the country after home loans,” he added.