Gold-Loan Securitisation Hits Roughly Rs 60,000 Crore in a Single Quarter

Reports indicate that India's loan securitisation market recorded close to Rs 60,000 crore of volume in a single quarter, with gold loans accounting for the largest share among asset classes securitised -- ahead of segments such as microfinance, vehicle loans and mortgage-backed paper.

Securitisation lets NBFCs and banks pool loan receivables (in this case, gold-loan books) and sell them to investors, freeing up balance-sheet capacity to originate fresh lending. A surge concentrated in gold loans suggests strong underlying demand for gold-backed credit and continued investor appetite for this asset class.

For gold-loan-focused NBFCs such as Muthoot Finance, Manappuram Finance and IIFL Finance, and for the banks that co-lend with or purchase pools from them, this is a meaningful business signal. At the same time, a rapid and sustained rise in gold-loan securitisation volumes can also be an early indicator of rising household liquidity stress, since gold loans are frequently used as a fast, collateral-backed source of consumption or emergency credit.

BankPulse's Gold Loan section tracks RBI's tiered loan-to-value (LTV) rules that govern how much can be lent against pledged gold -- rules directly relevant to how much of this securitised book NBFCs can originate per RBI's current framework.