Mumbai, August 2026 : Aditya Birla Capital’s non-banking finance company (NBFC) business has entered India’s rapidly expanding gold loan market and plans to establish up to 1,000 dedicated branches across the country over the next three years, intensifying competition in a segment that has attracted several major financial institutions.
The company plans to establish between 200 and 300 dedicated gold loan branches by March 2027, initially focusing on markets with strong demand for loans against gold jewellery. Over the following two years, it intends to expand its network to approximately 1,000 branches across India.
Rakesh Singh, Executive Director and CEO-NBFC of Aditya Birla Capital, said the company’s entry into the segment was part of its broader secured lending strategy.
“Gold loans are witnessing strong structural growth in India, and our entry into this segment is a natural extension of our secured lending strategy,” Singh said.
The new business will complement Aditya Birla Capital’s existing retail and micro, small and medium enterprise (MSME) lending operations. The company’s expansion comes at a time when gold-backed lending has emerged as one of the fastest-growing segments of the country’s retail credit market.
According to Reserve Bank of India data, outstanding loans against gold jewellery by NBFCs rose 69.3 per cent year-on-year to ₹3.41 trillion in June 2026, compared with ₹2.02 trillion a year earlier. The portfolio has more than doubled from ₹1.43 trillion in June 2024 to ₹3.41 trillion in June 2026.
Gold loans recorded the fastest growth among major retail loan categories, with annual growth accelerating from 40.6 per cent in June 2025 to 69.3 per cent in June 2026. The rapid expansion has encouraged diversified lenders to increase their presence in the segment.
Aditya Birla Capital’s move follows the recent entry of Tata Capital into the gold loan business. Tata Capital acquired nearly 89 per cent of Kerala-based Yogakshemam Loans last month, giving it an established platform from which to expand its gold-backed lending operations.
Other major NBFCs, including Shriram Finance, HDB Financial Services, Bajaj Finance and Piramal Finance, are also looking to strengthen their presence in the sector. Collectively, major NBFCs are expected to add nearly 3,000 branches in the coming years to meet rising demand.
The growing participation of large and diversified financial companies is expected to increase competition for established gold loan specialists such as Muthoot Finance and Manappuram Finance. While greater competition could expand access to formal credit, it could also put pressure on lending yields and profitability.
Financial analysts have cautioned that operating expenses could increase as companies compete for experienced employees and invest heavily in branch infrastructure. One analyst noted that retaining skilled employees could become more expensive as new players enter the market.
“There will be people-related stress and operating costs will go up. If you want to retain existing people, you will have to remunerate them better than what you were giving them in the past,” the analyst said.
However, the secured nature of gold loans provides lenders with an important risk-management advantage. Since the underlying gold acts as collateral, lenders can recover their exposure by selling the pledged assets in the event of a borrower default, subject to applicable regulations and procedures.
Saurabh Bhalerao, Associate Director at CareEdge, said increased competition could put pressure on lenders’ spreads but stressed that maintaining credit discipline and appropriate loan-to-value ratios would be essential.
“It is a secured lending product. If you take gold and lend against it while maintaining an appropriate loan-to-value ratio, the gold remains with you in the event of a default and can be sold to recover the loan,” Bhalerao said.
Despite these advantages, lenders face risks, including a potential sharp correction in gold prices. Falling gold prices could affect collateral values and require lenders to maintain appropriate risk controls. New entrants may also face higher initial costs as they recruit employees, establish branches and build the operational infrastructure required to manage large volumes of gold-backed loans.
Aditya Birla Capital’s NBFC business reported assets under management of ₹1.67 trillion in the first quarter of FY27, marking a 28 per cent year-on-year increase. Retail and SME loans accounted for approximately 68 per cent of its overall portfolio.
The company’s disbursements rose 34 per cent year-on-year to ₹21,201 crore, while profit before tax increased 32 per cent to ₹1,222 crore.
With gold-backed credit expanding rapidly and major financial institutions entering the sector, the next few years are likely to witness a significant reshaping of India’s gold loan industry. Aditya Birla Capital’s planned branch expansion signals its intention to establish a substantial nationwide presence and compete aggressively in one of the country’s fastest-growing secured lending markets.
(Disclaimer :The content of this article is sourced from a news agency and has not been edited by the Mavericknews30 team.)
