Gold loan defaults surged 30% to ₹6,696 crore ($805 million) by June 2024. This trend is being seen as an indicator of the economy slowing down. As gold prices surged, families pledged their gold to spend on household needs, but were unable to service the loans or reclaim the gold.

Banks and non-banking finance companies reported a combined gold loan outgo of ₹3 lakh crore ($36 billion), according to The Indian Express. The Reserve Bank of India (RBI) projects bad loans to rise to 5.3% under severe stress by March 2026 and flags risks from $65.49 billion in unhedged external commercial borrowings (ECBs), alongside concerns over consumer credit and equity valuations.

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