Gold loan growth exposes rising stress in NBFC portfolios
India’s gold loan balances surged, but rising delinquencies are exposing credit stress. Shriram Finance’s Stage 3 gold loans reached 3.12%, while OI Charts data showed short build-ups in both Shriram Finance and Bajaj Finance.
pre-market1 source ↓machine-written, see hownot a recommendation
- BAJFINANCE close
- ₹926.00
- On the day
- -3.27%
- Futures OI, short build-up
- +2.3%
- Put-call ratio
- 0.48
- Max pain
- ₹950.00
India’s gold loan market expanded sharply, but rising delinquencies are exposing pressure in borrower finances and lender asset quality. Bank gold loans rose 83% year on year to ₹5.6 lakh crore in August 2026, while NBFC gold loans increased 69% to about ₹3.6 lakh crore. The growth has increased lenders’ exposure to short-tenure borrowers and made collateral recovery conditions more important. 💼
Shriram Finance’s gross Stage 3 gold loans rose to 3.12% in September from 2.57% in June and 2.28% a year earlier. Bajaj Finance also reported a sequential increase in Stage 2 and Stage 3 assets, partly linked to short-tenure gold loan schemes that have since been discontinued. The figures indicate that gold loan delinquencies are rising even as the overall portfolio expands.
OI Charts data as of 21 Oct 2026 showed both stocks under pressure. Bajaj Finance closed at ₹926, down 3.3% on the day, with a 9.3% fall over 20 sessions. Its futures open interest rose 2.3%, indicating a short build-up; the put-call ratio was 0.48 and max pain stood at ₹950 for the 27 Oct expiry. Shriram Finance closed at ₹904.95, down 2.3% on the day and 10.6% over 20 sessions. Its futures open interest also increased 2.3% in a short build-up, with a put-call ratio of 0.57 and max pain at ₹960.
A further fall in gold prices could reduce collateral buffers and increase recovery risk if overdue accounts turn into defaults. For the sector, conservative underwriting, borrower-level checks and timely auctions remain central to containing losses. The immediate levels to watch are the ₹1,000 call open-interest walls in both stocks and the ₹960 put open-interest level for Shriram Finance; Bajaj Finance also has significant put open interest at ₹960. 📉
The next signals will be monthly asset-quality disclosures, changes in Stage 2 and Stage 3 assets, gold-price movements and the pace of collateral auctions. These will help establish whether the reported stress is concentrated in discontinued products or broadening across gold-backed lending. ⚖️
Source: Economic Times BFSI, 24 Oct 2026
Not investment advice. For informational purposes only.