Gold loans stand out again, account for 13% of incremental
Gold loans stand out again, account for 13% of incremental
Key Highlights
- MUMBAI: Gold loans continued to drive retail borrowing, accounting for more than a third of the incremental bank credit to the retail segment during the first four months of FY27 (AprilâJuly 2026).According to the latest Reserve Bank of India (RBI) data on the sectoral deployment of bank credit, overall retail credit commanded the lionâs share, accounting for 36% of all incremental bank credit.
- This was closely followed 3%.The banking sector as a whole is witnessing robust momentum.
- On a year-on-year (y-o-y) basis, non-food bank credit expanded 1% for the fortnight ended July 31, nearly doubling the 9.9% growth recorded during the corresponding period last year.The personal loans segment recorded a y-o-y growth of 16.2%, up from 11.9% a year ago, capturing a total incremental credit of over Rs 2.4 lakh crore.The standout performer was the âloans against gold jewelleryâ category.
The Indian banking sector is experiencing a surge in retail borrowing, with gold loans playing a pivotal role in driving this trend. According to the latest Reserve Bank of India (RBI) data, gold loans accounted for over a third of incremental bank credit to the retail segment during the first four months of FY27, which translates to 36% of all incremental bank credit.
The RBI's sectoral deployment of bank credit reveals that overall retail credit is dominating the landscape, with a lion's share of 36%. This was closely followed
On a year-on-year basis, non-food bank credit has seen robust momentum, expanding This represents nearly double the growth recorded during the same period last year, which stood at 9.9%.
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The personal loans segment has also witnessed significant growth, with a year-on-year increase of 16.2%, up from 11.9% a year ago. This has captured a total incremental credit of over Rs 2.4 lakh crore.
One standout performer in this segment is the "loans against gold jewellery" category, which has acted as a major growth driver, drawing an incremental credit of Rs 90,888 crore and making up 13.6% of all new non-food credit in the banking system.
Vehicle loans have also sustained strong double-digit growth, adding Rs 25,877 crore to the total incremental credit.
However, unsecured retail segments are showing signs of cooling, with credit card outstandings decelerating. Advances against fixed deposits have actually contracted, indicating a decline in lending activity.
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A significant turnaround has been recorded 5% in the same fortnight last year. The sector absorbed Rs 2.2 lakh crore in new credit, capturing a much higher share of the incremental credit pie.
The industrial push was largely driven
Despite registering an impressive year-on-year growth of 22.9%, the services sector has punched below its weight in capturing new credit. Services captured only 20.25% (Rs 1.4 lakh crore) of the incremental credit, noticeably lower than its 28.2% share of the overall outstanding credit pie.
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I write about the forces shaping business and the global economy, from startup growth and changing markets to international trade and policy. My work focuses on breaking down complex developments into clear, practical insights and understanding what they could mean for businesses, investors, and the wider economy.
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