Retail credit cools in Q4 after festive rush, gold loans lead

MUMBAI: Even as gold loans grew 50.4% in FY26 to emerge as the primary driver of retail credit, the home loan portfolio expanded only 9.4%, with growth largely led by higher ticket sizes, while credit card outstandings remained the slowest segment with flat year-on-year growth.

According to a latest report by CRIF India, the March quarter saw a clear slowdown after the festive season. Auto loans declined 11.6% sequentially, while two-wheeler loans fell 22.1%, reflecting moderation in discretionary consumption. Similar cooling was visible in consumer durable financing after festive demand tapered off.

The overall retail lending portfolio rose to Rs 170.2 lakh crore as of March 2026, registering a 16.6% year-on-year increase and a 4.6% sequential rise. Consumption loans grew 15.3% year-on-year to Rs 118.6 lakh crore, supported by expansion across gold loans, personal loans and consumer durable financing. In contrast, the home loan segment remained relatively muted, growing 9.4% year-on-year to Rs 44.4 lakh crore and 3.4% sequentially, with growth driven by higher ticket sizes rather than volumes. Credit card balances remained flat year-on-year at Rs 3.4 lakh crore and declined 1.1% on a quarter-on-quarter basis.

Gold loans emerged as the fastest-growing segment, with the outstanding portfolio rising to Rs 18.6 lakh crore, aided by higher collateral values due to a surge in gold prices and strong demand. Personal loans grew 12.9% year-on-year, while consumer durable loans expanded 20.8%. Vehicle loans also recorded annual growth, with auto and two-wheeler loans rising between 13.9% and 15.1%.

According to CRIF, a structural shift is underway in retail lending, with portfolio growth outpacing the rise in active loan volumes, signalling a move towards larger ticket sizes across products. This premiumisation trend is visible in gold loans, home loans and consumer durable financing.

Loan originations remained strong, with total originations value rising 42.2% year-on-year and 9.2% sequentially in Q4 FY26. Gold loans led this momentum, while personal loans and consumer durable loans recorded over 30% annual growth. Housing loan originations held steady sequentially, supported by higher ticket sizes rather than a rise in new borrowers.


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