The Reserve Bank of India’s easing of rules for small gold loan borrowers and new co-lending norms is encouraging new players to expand their business. 

Manipal Fintech, which until now was a gold loan aggregator, has decided to get into the co-lending business and open gold loan branches early next year.

Backed by the Manipal Group with interests in healthcare, education and technology, the three-year-old gold fintech outfit has already enabled Rs 15,000 crore of loans across four lakh customers for lenders like Axis Bank, Karnataka Bank and DBS Bank.

Manipal Fintech chief executive officer Puja Abhishek Singh now wants to step on the gas pedal. “RBI’s new regulations will usher in transparency in the co-lending space and allow many smaller players to enter the gold loan segment. We will get into co-lending and open our brick-and-mortar gold loan branches in early 2026. We will start with our home state Karnataka and grow from there,” she says.

In the revised guidelines which come into effect from 1 January 2026, RBI has allowed co-lending arrangements between all regulated entities such as banks, non-banking financial companies (NBFCs) and financial institutions. 

“Though there is no specific mention about gold loans, RBI has now allowed NBFCs to get into co-loan arrangements amongst themselves rather than necessarily engage with a banking partner. This means a small NBFC can work with a larger one. We will see this kind of co-lending arrangement happen in gold loans even as the doors open for many small NBFCs,” explains Singh.

The entry of more players will help to expand the gold loan business in India where only 7% of the market belongs to the organised sector. “So, there is a lot of latent assets we need to tap into. Besides, it will also help people to come out of the clutches of the pawn brokers who charge exorbitant rate of interest,” Singh says, even as she readies the company to throw its hat into the ring.

The requirement of each lender in a co-lending arrangement to retain a minimum of 10% of the loan’s value will also help to ensure fair risk sharing. Besides, the RBI has revised the norms for gold loans which will support small borrowers. This includes raising the loan-to-value (LTV) ratio on gold loans up to Rs 2.5 lakh to 85% per borrower from the present 75%. Such small-ticket loans will not require credit appraisals.

In the background of such developments, Manipal Fintech has set the ambition of getting into the gold loan business directly through its branches after the co-lending base is established. “It is a natural progression since the promoter group had founded Syndicate Bank. We will start to directly lend as a gold loan NBFC and then move on to other products. The timing is also right as gold loans are the fastest-growing segment,” Singh says.

The organised gold loan market is estimated at Rs 8 lakh crore and is growing at a brisk pace in the wake of rising gold prices and increased formalisation of the lending sector. Some estimates peg the segment to hit Rs 15 lakh crore by 2027-28. The opportunity is huge as domestic gold holdings stand at an estimated 25,000 tonnes translating to around $2.4 trillion. 

The formal gold loan market is set to penetrate further into the smaller towns. “We are working with lenders more in the tier-2 and tier-3 cities. About 70% of gold loans happen in the South but we are also seeing new pockets like Maharashtra, Gujarat, West Bengal and Odisha pick up,” says Singh. 

The north is emerging to be a new market. “Earlier, pledging gold in the north was a taboo. But now they are gradually treating it as a commodity. Families are taking gold loans to fund their children’s education. Young first-generation entrepreneurs are taking gold loans to fund their small businesses,” Singh, who had earlier worked in the credit card industry with stints at Mastercard and SBI Cards, explains. 

Manipal Fintech is betting on technology to be its differentiator while working towards modernising the gold loan processes. Technology, for instance, can be brought in to standardise the gold checking process and ascertaining price.

“The gold loan business is operations heavy where the yellow metal’s purity checking requires investments in machines and also dependence on gold assayers. We are trying to see if technologies like AI can be used in these processes to ease up operations,” Singh sums up.