From locker to loans: 90% surge in gold financing leads India's credit boom

Higher-ticket loans show better credit performance compared to small-ticket loans.

Forget the traditional locker; Indians are putting their gold to work like never before. According to the latest CRIF High Mark How India Lends report for Q3 FY26, gold loans have emerged as the undisputed heavyweight champion of the retail credit market. Driven by a massive rally in gold prices, originations for gold loans more than doubled—skyrocketing by 90.3% year on year.

 

This "gold rush" is the crown jewel of a retail lending portfolio that has now reached a whopping ₹162.7 lakh crore. From leveraging family ornaments to funding new ambitions, the third quarter of fiscal year 2026 shows a nation increasingly comfortable with using secured assets to fuel growth.

 

 

Beyond the Bullion: The Auto Loan Surge

While gold stole the spotlight, the wheels of the economy were turning just as fast. A combination of GST rate rationalization and peak festive demand triggered a massive wave of vehicle financing:

 

Two-Wheelers: Saw a phenomenal 46.7% QoQ surge in originations.

 

Auto Loans: Jumped by 22.1% QoQ, as buyers rushed to take advantage of favorable policy shifts.

 

Consumer Durables: Festive spirit boosted this segment by 14.7%, proving that the Indian consumer was in a spending mood this December.

 

Premiumisation: The Rise of the "Big Ticket"

The report highlights a sophisticated shift in borrowing habits: we aren't just taking more loans; we are taking bigger ones. This "premiumisation" trend is visible across the board:

 

Gold Loans: It’s not just small change anymore; loans above ₹5 lakh now contribute 36.5% of total value (up from 24% last year).

 

Home Loans: The average ticket size has climbed to ₹33 lakh, with high-end properties (loans >₹75 lakh) now making up 40% of all new originations.

 

Credit Cards & Personal Loans: While volume is high in smaller tickets, the "big ticket" personal loans (above ₹5 lakh) are showing incredible resilience, with delinquency rates (PAR 91-180) sitting safely below 1%.

 

The competitive landscape is seeing a fascinating tug-of-war between agile NBFCs and sturdy Public Sector Undertakings (PSUs):

 

PSU Banks are the new kings of the "Big House" loan, leading private banks in home loan origination value (50.3% vs 23.3%). They also maintained a dominant 45.8% share in gold loan value.

 

NBFCs, meanwhile, remain the masters of speed and volume, maintaining a massive 91.1% share of personal loan volumes and grabbing a bigger slice of the gold loan market (30.7% value share).

 

Asset Quality: Growing Faster, Failing Less

Perhaps the most impressive takeaway is that India is borrowing more responsibly. Even as originations accelerated by 41%, the overall asset quality improved. The PAR 31–180 (loans overdue by 31 to 180 days) dropped to 3.1%, down from 3.6% a year ago.

 

Geographic Diversification Gains Momentum:

Growth in Beyond Top 100 cities continued to gain traction, particularly in mass-market products such as personal loans (42.3%), two-wheelers, and consumer durables, indicating deeper penetration into semi-urban and rural geographies. This trend reflects expanding access to formal credit and increasing borrower participation outside metropolitan centres.

 

In contrast, home loans (51% from Top 8 cities) and credit cards (41.5%) remained relatively metro-centric, underscoring their continued concentration in larger urban markets. However, the steady expansion of digital lending infrastructure is progressively enabling wider outreach, supporting incremental growth in tier 2 and tier 3 cities and strengthening the overall geographic diversification of retail credit.

 

The Q3 FY26 edition underscores a retail credit market that is expanding steadily, with improving performance metrics and evolving product preferences shaping lending strategies across institutions.