Gold loans lead retail credit growth as lenders pivot to secured assets

Retail loans rose 16.6 per cent to Rs 170.2 trillion in FY26, with gold loans emerging as the fastest-growing segment amid rising bullion prices and regulatory easing

Retail credit last financial year shifted towards secured lending with gold loans emerging as the fastest-growing segment, while home loans and vehicle finance maintained steady momentum.

 

Outstanding retail loans rose 16.6 per cent year-on-year (Y-o-Y) to ₹170.2 trillion as of March 2026, according to the CRIF High Mark data.

 

Consumption loans grew 15.3 per cent to ₹118.6 trillion, supported by broadbased expansion across gold loans, personal loans, and financing consumer durables.

 

Gold loans were the standout performer. Outstanding balances surged 50.4 per cent Y-o-Y to ₹18.6 trillion, overtaking personal loans to become the largest retail credit product after home loans.

 

Rising bullion prices sharply lifted collateral values, pushing the average ticket size up 52 per cent Y-o-Y to ₹2.19 lakh in Q4FY26.

 

Regulatory easing also aided growth. The Reserve Bank of India’s (RBI’s) decision to raise the loan-to-value cap for gold loans to 85 per cent (going up to ₹2.5 lakh) widened the borrower base, particularly among first-time formal borrowers.

 

Despite rapid expansion, asset quality improved. The ratio of gold loans for which repayment was pending for 31-180 days declined to 1.2 per cent in March from 2 per cent a year earlier. This was aided by stronger collateral coverage and rising gold prices.

 

Home loans, the largest retail segment with outstanding balances of ₹44.4 trillion, grew at a steadier 9.4 per cent Y-o-Y. Growth in balances continued to outpace active loan growth, which stood at 2.5 per cent, reflecting ongoing premiumisation in the mortgage market.

 

Loans with a ticket size above ₹75 lakh account for 40.7 per cent of home-loan originations by value, up from 33.6 per cent in Q4FY24.

 

Public-sector banks retained leadership in the segment, accounting for 44.5 per cent of origination value in Q4FY26.

 

Personal loans recovered from the moderation seen in FY25, with balances rising 12.9 per cent Y-o-Y to ₹16.5 trillion. Full-year originations rose 28.9 per cent to ₹11.5 trillion.

 

Non-banking financial companies (NBFCs) continued to dominate small-ticket unsecured lending, accounting for nearly 91 per cent of origination volumes in Q4 FY26.

 

However, stress indicators remain elevated in parts of the unsecured book. PAR 180+ (portfolio at risk; that is dues pending for 180 days and more) in personal loans stood at 5.3 per cent in March 2026, while early-stage delinquency in public-sector banks worsened sequentially.

 

Vehicle finance maintained healthy growth though the momentum of disbursement softened after the festival season.

 

Auto loans grew 13.9 per cent Y-o-Y and two-wheeler loans 15.1 per cent, but originations declined sequentially in Q4FY26 as demand normalised.

 

Loans for consumer durables expanded 20.8 per cent Y-o-Y to ₹1.01 trillion, aided by rationalisation in goods and services tax and growing demand for premium products. NBFCs remained dominant, controlling 85 per cent of the value by origination.

 

The credit card, by contrast, remained subdued. Outstanding balances were flat Y-o-Y at ₹3.4 trillion, while new issuances fell for a second consecutive year as lenders tightened underwriting standards amid regulatory scrutiny and concerns over unsecured retail stress.