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Retail credit lost pace after the festive rush, but gold loans raced ahead as lenders leaned on secured lending and rising collateral values.
Key Takeaways
India’s retail credit market slowed in Q4 FY26 after a strong festive quarter. Total retail loans still grew 16.6% YoY to ₹170.2 lakh crore as of March 2026, according to CRIF High Mark data reported by The Times of India on 21 May 2026. Gold loans became the biggest growth driver, while credit cards and vehicle loans saw weaker sequential demand.
In the short term, this shift may help lenders reduce exposure to unsecured credit. In the long term, fast gold-loan growth may create repayment stress for households if gold prices fall or income growth stays weak.
The table below shows how the main retail loan categories performed in Q4 FY26. Gold loans grew faster than every other major segment.
Gold loans have now overtaken personal loans to become the second-largest retail credit product after home loans. Business Standard reported on 20 May 2026 that lenders are shifting towards secured assets as they stay cautious on unsecured retail credit.
For many households, small traders and self-employed borrowers, gold loans offer quick access to formal credit. A borrower with jewellery can get funds faster than a personal loan, especially when income documents are limited.
The risk is also real. If borrowers take larger loans only because gold prices are high, repayment pressure can rise later. In southern India, this trend is already large. The Indian Express reported on 20 May 2026 that Tamil Nadu, Andhra Pradesh, Karnataka, Telangana and Kerala together held ₹13.94 lakh crore of the ₹18.6 lakh crore gold-loan outstanding.
LoansJagat’s earlier report said gold loans formed 36% of retail loan volumes and 39% of retail loan value in the December 2025 quarter, showing that the shift had started before Q4 FY26.
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Stakeholders are seeing stronger demand for secured products. Reuters reported on 14 May 2026 that Muthoot Finance’s Q4 profit doubled due to strong gold-loan growth. The solution for lenders is tighter loan-to-value checks, better borrower screening and caution on repeat top-ups.
Gold loans are now driving India’s retail credit story after the festive rush cooled. The growth is strong, but lenders and borrowers need caution as jewellery-backed credit expands rapidly.
What Should Someone Check Before Taking A Gold Loan From A Bank Or NBFC?
Before taking a gold loan, compare 3 to 4 lenders, not just the interest rate. Check processing fee, valuation charges, renewal charges, foreclosure rule and late payment penalty. Ask how much loan they will give against your gold and what happens if the gold price falls. Also confirm where the jewellery will be stored and when auction notice is sent.
Banks may offer lower rates, while NBFCs may process faster. Take the loan only for a short period and repay on time. Otherwise, the interest cost can rise quickly and pledged jewellery may be at risk.
How Can Someone Get Money Against Gold In India?
In India, a gold loan is taken by giving gold jewellery to a bank or NBFC as security. The lender checks the gold’s purity, weight and current market price. Based on this, the loan amount is fixed. The borrower does not get the full gold value, only a certain %. Interest has to be paid as per the chosen plan.
After the full loan and interest are paid, the gold is returned. If the borrower does not repay on time, the lender can sell the gold after proper notice. This loan is mostly used for urgent cash needs.
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