India's retail credit market experienced significant expansion in Q4 FY26, with gold loans emerging as the primary growth driver. According to CRIF High Mark's latest report, total retail loans outstanding reached ₹170.2 lakh crore as of March 2026, registering a 16.6% year-on-year growth and 4.6% quarter-on-quarter increase. The gold loan segment demonstrated exceptional performance with portfolio outstanding rising 50.4% year-on-year to ₹18.6 lakh crore and 15% quarter-on-quarter growth. As reported by CRIF High Mark, this growth was attributed to elevated gold prices, larger ticket sizes and regulatory tailwinds. The retail credit landscape is increasingly shifting toward secured and collateral-backed lending, with gold loans leading this transformation.
The retail credit landscape is increasingly shifting toward secured and collateral-backed lending, with gold loans leading this transformation. According to the report, consumption loans grew 15.3% year-on-year to ₹118.6 lakh crore, while home loans maintained steady momentum with portfolio outstanding reaching ₹44.4 lakh crore, up 9.4% year-on-year. Mohit Jain from Axis Bank noted that gold loans have now emerged as the second-largest product in retail lending after home loans, reflecting evolving borrower needs and increased comfort with loans against gold. The housing finance segment showed continued premiumization with growth in balances outpacing active loan growth. This trend toward secured lending is being reinforced by banks like Karnataka Bank, which has intensified digital transformation initiatives including strategic partnerships for co-lending in the gold loan segment.
Other retail segments showed varied performance in Q4 FY26. Personal loans grew 12.9% year-on-year, while consumer durable loans expanded 20.8%. Vehicle loans posted double-digit annual growth, though originations momentum moderated after the festive season. However, some unsecured categories faced challenges, with auto loan originations declining 11.6% quarter-on-quarter and two-wheeler loan originations falling 22.1% sequentially. Credit card balances remained subdued, staying flat year-on-year and negative on a sequential basis. CRIF High Mark noted that portfolio quality improved across most retail lending categories, with delinquency levels easing across secured segments including home loans and gold loans. The banking sector is seeing a divergence where mid-sized players are focusing on balance sheet health over market share, with banks like Karnataka Bank achieving significant asset quality improvements.
The latest banking sector results reflect this industry-wide focus on asset quality over aggressive growth. Karnataka Bank reported a 60% surge in Q4 profit to ₹400 crore despite flat revenue, driven by a sharp reduction in bad loans with NNPA dropping to 0.98% from 1.31% in the previous quarter. This performance mirrors the industry trend of focusing on risk-calibrated growth as the RBI maintains vigilant stance on unsecured lending. Banks with strong capital adequacy and clean books like Karnataka Bank are better positioned to navigate regulatory tightening. The profit surge and improved asset quality metrics provide strong valuation cushion, even as some banks prioritize margin protection over aggressive loan book expansion in the current market environment.
