New Delhi, Sept. 5 -- Large private banks are stepping up investments in gold lending and could gain market share in higher-ticket loans as strong growth, attractive returns and rising customer acceptance make the segment increasingly competitive, according to a Motilal Oswal Financial Services report.

The report said private banks have historically had a limited presence in organised gold lending because building a profitable business requires upfront investment in specialised branches, trained gold valuers, secure vaulting facilities and operating systems. This also results in a longer payback period compared with several other retail lending products.

Gold-loan NBFCs and public sector banks have an advantage in rural and semi-urban m...