Bajaj Finance has stopped offering short-term gold-loan schemes that it says contributed to a sharp increase in loans flagged for elevated credit risk, even as its gold-loan business expanded rapidly.
The Indian lender said Stage 2 gold-loan assets rose ₹1,047 crore in the quarter ended Sept. 30, bringing the balance to ₹1,099 crore. Its investor presentation showed gold-loan assets under management grew 105% from a year earlier to ₹24,195 crore, up from ₹11,789 crore.
Stage 2 is an accounting category for loans whose credit risk has increased significantly since they were issued. It does not, by itself, mean a loan is credit-impaired.
Bajaj Finance Chief Operating Officer and Chief Financial Officer Sandeep Jain said customers using three-month schemes had to visit a branch to pay interest or renew their loans. Some fell behind, he said, leaving them owing both outstanding principal and interest to bring their accounts current. The company stopped offering the schemes in August 2026.
Vice Chairman and Managing Director Rajeev Jain said on the Oct. 19 earnings call that ₹550 crore of the affected gold loans had returned to Stage 1 by then. The company's investor presentation put the overall quarterly rise in Stage 2 and Stage 3 assets at ₹1,601 crore. Stage 2 gold loans accounted for ₹1,047 crore of that increase, as noted in earlier coverage of its loan book.
In a separate credit measure, the gross nonperforming-asset ratio for gold loans rose to 0.70% on Sept. 30 from 0.35% on June 30. Management said it did not expect the Stage 2 increase to affect credit costs or gold auctions.
Gold loans represented 4.14% of Bajaj Finance's consolidated assets under management on Sept. 30. The lender added 321 gold-loan branches during the quarter, bringing its network to 2,022.
Sandeep Jain said the company was developing monthly or quarterly interest-payment options for longer loans, including 12-month terms it already offered. Bajaj Finance aims to have 2,700 to 2,800 gold-loan branches by the end of fiscal 2027 in March.
