At a Mumbai branch of gold loan provider Manappuram Finance Ltd, customer walk-ins have halved in the past week.
At another, customers are rushing in to release their pledged gold, expecting further falls in the price of the metal.
Officials at these branches are scrambling to contact customers asking them to pay their dues and, in some cases, top up their collateral after the value of gold tumbled to a 20-month low.
Manappuram Finance and Muthoot Finance Ltd - two of India's biggest gold pawn companies - now face the risk of a slowdown in their business and, worse, rising bad loans because some borrowers may choose to default and not redeem pledged gold that is now worth less than when the loans were made.
Text: Swati Pandey and Siddesh Mayenkar, Reuters