A distinct shift is emerging in India's retail borrowing patterns as consumers increasingly favor gold-backed loans over traditional home and vehicle financing. Minimal documentation requirements combined with instant branch-level disbursements have positioned gold loans as the preferred choice for immediate liquidity needs. Fresh data from the Reserve Bank of India underscores this trend, identifying gold-backed borrowing provided by non-banking financial companies as the fastest-growing credit category across all major financial segments.
Gold Loans Surge by 69 Percent
According to the Reserve Bank report, total outstanding gold loans disbursed by non-banking financial companies (NBFCs) escalated to Rs 3.42 lakh crore in June 2026. This marks a sharp 69 percent rise compared to the Rs 2.02 lakh crore recorded in June 2025. Tracking back further, total gold loan credit stood at Rs 1.44 lakh crore in June 2024, demonstrating consecutive years of steep acceleration. The convenience of pledging gold jewelry at institution branches to secure immediate funds without long waiting times continues to drive this robust expansion.
Retail Credit Expansion and Agricultural Recovery
Retail loans remain the principal engine powering overall credit growth for non-banking financial firms. In June 2026, retail credit registered a year-on-year growth rate of 20.3 percent, up from 14.3 percent during the corresponding period of June 2025. Steady momentum in home loans, auto loans, and jewelry-backed borrowing together sustained consumer credit expansion. Concurrently, credit extended toward agriculture and allied activities experienced a significant turnaround, expanding by 17.9 percent in June 2026 compared to 5.1 percent in June 2025.
Industrial Sector Credit Experiences Slowdown
In contrast to the buoyant retail environment, credit growth to the industrial sector witnessed a clear deceleration. Industrial lending growth moderated to 6.7 percent year-on-year in June 2026, down from the 10.3 percent recorded in June 2025. The primary factor behind this slowdown was sluggish lending activity within the infrastructure segment, which traditionally represents the largest component of total industrial credit.
Services Sector Moderates While Commercial Real Estate Holds Steady
Lending growth by NBFCs to the services sector also eased during this period. Credit growth in services reached 17.6 percent in June 2026, dropping from 22.4 percent in June 2025. This moderation was primarily led by reduced credit demand from trade and transport operators. Nevertheless, lending to the commercial real estate sector resisted the broader slowdown, maintaining strong growth momentum.
