NBFC gold loans surge 68.5% in July as lending against jewellery stays elevated: RBI

Loans against gold jewellery by non-banking financial companies (NBFCs) grew 68.5% in July 2026, continuing a months-long trend of elevated lending against precious metals, the Reserve Bank of India said on Monday.

Lending to facilitate consumer durable purchases also accelerated to 51.5% in July 2026, from 46.8% in June and 18.8% in the year-ago period, according to periodic data released by the Reserve Bank.

Gold loans remain the fastest-growing NBFC retail credit segment

The gold loan segment had recorded growth of 69.3% in the previous month and was up 43.9% from the year-ago period, according to the central bank.

The sharp increase in gold prices over the last few quarters has made the lending ecosystem more comfortable with the segment, as lenders benefit from high-value security, which also carries significant emotional value for borrowers.

The sustained pace of growth has made gold-backed borrowing one of the key drivers of retail credit expansion among NBFCs. Unlike several other forms of consumer lending, gold loans are backed by a tangible asset, allowing lenders to extend credit against the value of pledged jewellery.

However, concerns have also been raised over the shift away from asset creation and the increasing propensity to borrow for consumption-related expenses.

The housing loans segment for NBFCs, including housing finance companies, grew 11.9% year-on-year in July, compared with 11.4% in June and 4% in July 2025.

Consumer durable loans jump 51.5% in July from 18.8% a year ago

Vehicle loans by NBFCs grew 15.1% in July 2026, broadly steady from 15.2% in June but lower than the 15.3% growth recorded in July 2025.

Overall retail credit for NBFCs and housing finance companies (HFCs) grew 21.4% in July 2026.

The sharp acceleration in consumer durable lending comes amid a broader increase in retail credit, although gold-backed borrowing continued to record substantially higher growth than other major retail loan categories.

The contrasting growth rates across different loan categories indicate that retail credit demand remains uneven, with gold-backed borrowing and consumer durable financing expanding at a faster pace than housing and vehicle loans.

Services credit growth slows, industry lending rises 7.4%

Growth in loans to the services sector slowed to 15.2% in July 2026, from 24.5% in July 2025 and 17.6% in June this year, the RBI said.

Loans to the industry segment grew 7.4% in July 2026, lower than the 9.3% growth recorded in the year-ago period but higher than the 6.7% expansion seen in June this year, according to the central bank.