Ujjivan Small Finance Bank, which has a strong microfinance base, is targeting a ten-fold increase in its gold loan portfolio to ₹4,000 crore over the next 2–3 years. The push into gold loans is part of its broader strategy to lift the share of secured loans to 70% of its total assets.
“Gold is relatively newer vertical for us but in the last one year we are seeing strong demand from our existing and new customers across microfinance, branch banking and other businesses,” Vibhas Chandra, Head of Microbanking and Gold Loan, told FE. “Given the exponential growth in the gold loan portfolio, we expect our gold loan book to reach ₹3,000–4,000 crore in the next 3 years,” he added.
An overview of Ujjivan’s gold loan portfolio
Ujjivan’s gold loan portfolio rose 565% year-on-year to ₹412 crore in the September 2025 quarter, albeit on a low base. Gold loans, however, make up just 0.2% of the lender’s ₹34,588 crore gross loan book. Chandra attributes the momentum to rising gold prices and the RBI’s new gold lending guidelines that leveled the playing field between banks and gold loan NBFCs.
Ujjivan serves 85 lakh microfinance customers out of its total base of 99 lakh customers through 766 branches across 26 states and union territories. “We have about one crore customers and we see a lot of overlap and scope for cross-selling gold loan to our existing customers as well as new-to-bank customers,” Chandra said.
As of September 2025, Ujjivan offers gold loans through 326 branches, with 37% located in the South, followed by the North (26%) and the East (25%). “Gold loan in about 40% of branches and next one year we will expand gold loan in 90% of our branches,” Chandra said, adding that the bank sees significant untapped potential in non-southern markets such as West Bengal, Tripura, Assam, Odisha, Uttar Pradesh, Punjab and Rajasthan.
RBI’s guidelines
In June, the RBI issued comprehensive norms on loans against gold and silver, introducing borrower-friendly measures including a higher LTV cap of 85% for loans up to ₹2.5 lakh, compared with the earlier 75% threshold. The guidelines take effect from April 2026.
Chandra noted that Ujjivan will be measured in its approach to LTVs given volatility in gold prices. “As far as LTV is concerned, we have to be a little cautious because gold loan prices are all time high at this point of time,” he said, adding that the bank would maintain an average LTV of about 72%.
Ujjivan, which is awaiting a universal banking licence from the RBI, aims to raise the share of secured assets to 65–70% of its total loan mix by FY30. As of September 2025, total advances grew 14% year-on-year to ₹34,588 crore, while secured advances rose 54% to ₹16,173 crore, accounting for 47% of the portfolio. The secured book comprises housing, MSME loans, vehicle finance, gold loans and agri-banking.