Gold Loans Jump While Export Credit, Consumer Loans Slip

Banks are lending more, but not evenly. Gold loans are rising fast, while export credit and consumer loans have weakened, showing a clear shift towards safer, secured lending.

India’s latest banking data show a sharp split in credit trends. By the fortnight ended 28 February 2026, export credit fell 14% to ₹21,925 crore and consumer loans dropped 10% to ₹10,270 crore. 

Their combined share in total bank credit was just 0.2%, but the decline is still notable because it comes at a time when overall lending is growing. In contrast, gold loans surged 128% year-on-year, reflecting a strong shift in both borrower demand and bank preference towards collateral-backed credit. 

Secured Lending Gains As Banks Turn Cautious

The broader credit story is still positive. Non-food bank credit rose 14.3% year-on-year in February 2026, while credit to industry grew 13.5%, showing that banks are expanding books but choosing segments more carefully. 

Reporting by The Economic Times published on 31 March 2026 pointed to a clear tilt towards gold-backed loans even as trade-linked and unsecured categories weakened. LoansJagat, in its report published on 7 March 2026, said gold loans had become the fastest-growing bank loan category as banks moved towards secured credit.
 

This shift also comes despite lower borrowing costs. The Economic Times reported on 31 March 2026 that the weighted average lending rate on fresh rupee loans fell to 8.44% in February, while private banks cut fresh lending rates to 9.16%. Even with rates easing, banks appear more comfortable backing secured retail products than unsecured consumer credit.

Previous Developments On This

The build-up had started earlier. LoansJagat reported on 28 February 2026 that gold loans had already crossed ₹4,00,517 crore as on 31 January 2026, after logging 128% year-on-year growth. The same report said export credit had already shrunk 17.2% in January, showing this was not a one-month move. 
 

External conditions have added pressure. Reuters reported on 30 March 2026 that the rupee touched a record 95.21 per US dollar and closed at 94.83, ending FY26 with its worst annual fall in 14 years. On 31 March 2026, Reuters also said the slide was linked to capital outflows, high oil prices and weak investor confidence. That backdrop has made trade-linked credit riskier and pushed lenders towards safer assets.

Statements By Stakeholders

Banking data tracked by The Economic Times show lenders are still growing credit but are leaning towards lower-risk categories. 

LoansJagat said high gold prices and bigger ticket sizes have supported gold loan demand. Reuters’ market reports suggest macro stress, including rupee weakness and oil shock, has made risk selection tighter across the system.

Conclusion

India’s credit growth is intact, but the pattern has changed. Gold loans are racing ahead while export credit and consumer loans lose pace, showing where banks now feel safer.