$5 trillion gold lying with Indian households: Kotak explains macro downside of Midas touch
Kotak Institutional Equities disclosed that Indian households own about $5 trillion in gold, a record high that could alter savings patterns. The report was issued on March 23, 2026.
Gold has long been a preferred store of value in India, especially during periods of high inflation and currency volatility. Recent RBI policy shifts and a slowdown in bank deposits have accelerated the shift toward bullion.
The concentration of wealth in gold weakens the depth of financial intermediation, as deposits that would fund lending are diverted to physical assets. It also tightens RBI liquidity and could pressure the current account as gold imports increase. However, the sector may benefit short‑term from higher gold prices and reduced bank funding costs.
Households and wealth managers are most affected, as they adjust portfolios toward gold. RBI will need to monitor liquidity gaps and may tighten reserve requirements or adjust gold import duties. Banks could see reduced deposit inflows, impacting loan growth.
- $5T gold holdings strain RBI liquidity
- Gold shift weakens bank deposit base
- Watch RBI gold import duty changes