Home / Business and Economy / South India Banks See Gold Loan Surge
South India Banks See Gold Loan Surge
13 Aug
Summary
- Gold loan portfolios in South India have nearly doubled in three years.
- Rising gold prices and increased credit demand are key drivers.
- CSB Bank experienced the fastest growth, more than doubling its portfolio.
In South India, banks have experienced a remarkable surge in their gold-loan portfolios, which have nearly doubled within the last three years. As of June 2026, the aggregate gold-loan book of five prominent private sector lenders—Federal Bank, CSB Bank, South Indian Bank, Karur Vysya Bank, and City Union Bank—climbed to ₹1.40 lakh crore. This figure represents a substantial 91.2% increase from the ₹73,248 crore recorded in June 2023.
The growth trajectory has notably accelerated, with a 35.8% increase in the latest 12-month period ending June 2026. This expansion is fueled by gold prices that have more than doubled since early 2023, coupled with a heightened demand for credit secured by gold. Southern banks leverage their established regional presence, deep borrower relationships, and expertise in jewelry valuation to maintain an advantage in this lending segment.
CSB Bank stood out with the fastest growth, its gold loan portfolio more than doubling to ₹21,906 crore over the three-year period. This now constitutes approximately 54% of its gross advances, the highest concentration among the surveyed banks. Federal Bank leads in absolute volume as the largest gold lender, with its portfolio nearly doubling to ₹41,476 crore.
