Public sector banks have successfully regained market share in key secured lending segments over the past year, according to the Feb 2026 Experian Industry Insights report on lending trends. As reported by The Times of India, PSBs increased their share in auto loans to 36% in Q3 FY26 from 32% a year earlier, representing a four percentage point gain. Their share in home loans also rose to 35% from 33% over the same period. In contrast, private banks saw marginal declines in these segments, with their auto loan share slipping to 34% in Q3 FY26 from 35% a year earlier, while maintaining the largest share at 42% in home loans. This market share expansion has been supported by improving asset quality across the industry, with NPA levels seeing consistent decline sector-wide, as reported by The Economic Times.
Gold loans have emerged as the dominant growth driver in India's retail credit landscape, with disbursements surging 94% year-on-year to ₹816,000 crore in the October-December 2025 quarter, according to the latest Equifax India report. Public sector banks continue to dominate this segment with a 46% share, while NBFCs are expanding at a significantly faster pace with gold loan disbursements growing 189% year-on-year to ₹253,000 crore during the period. The rapid expansion suggests a clear shift in borrower preference toward gold-backed credit as a flexible and quick source of liquidity. High-value gold loans above ₹2 lakh have emerged as the fastest-growing segment, indicating a structural move toward higher-ticket secured lending. Importantly, the surge in gold lending has far outpaced the growth in gold prices, with gold prices growing at roughly 25% CAGR over the past three years while gold loan disbursements expanded 94% in the last year alone, suggesting a strong product substitution effect as borrowers increasingly opt for gold-backed loans over other unsecured credit options.
Personal loans have emerged as a key growth driver, with personal loan disbursements rebounding by ~34% year-on-year, according to the latest Equifax India report. PSBs are leading this growth at 42% growth—nearly double that of private banks, demonstrating their strategic focus on secured lending segments. Unsecured personal loans have also returned to strong growth after a brief slowdown, with disbursements rising around 34% year-on-year, indicating a recovery in consumption-led borrowing demand. Fintech lenders also continued to capture a share of high-frequency, short-tenure loans, with disbursements growing 48% year-on-year. High-ticket borrowers have demonstrated strong resilience, with Net 90+ delinquency remaining low at 0.4% for PSBs and 0.6% for private banks in this segment. As per Equifax Managing Director Aditya B Chatterjee, "India's retail credit market is witnessing a rare alignment of accelerated growth and improving asset quality. The strong pivot toward secured assets, particularly Gold Loans, reflects a deliberate industry shift toward resilience and capital preservation." Over 85% of live AUM remains concentrated in Prime and Super Prime borrowers (score >700), indicating disciplined underwriting practices across the sector.
In unsecured lending segments, private banks continue to dominate credit cards with a 72% share, as reported by The Times of India. However, they are facing rising competition from NBFCs in personal loans, where private banks accounted for 46% of the personal loan market in Q3 FY26, down from 48% a year earlier. NBFCs increased their share in personal loans to 36% from 33%, demonstrating the intensifying competition across different lending categories. The competitive landscape is further complicated by the aggressive shift towards term deposits offering rates below 7%, which highlights an increasing cost of funds for banks seeking to retain depositor capital, even as lending rates fall.
India's retail credit market is witnessing one of its strongest expansion phases in recent years, with fresh disbursements rising 40% year-on-year in the October-December 2025 quarter while total assets under management (AUM) expanded nearly 13%, according to the Equifax India report. Despite strong growth in credit origination, asset quality metrics have remained stable or improved across major retail products. Personal loan slippages declined to 0.65% in December 2025 from 0.86% a year earlier, while home loan slippages eased marginally to 0.15% from 0.16%. Net 90+ delinquency levels across most retail loan categories have also stabilised, reflecting tighter underwriting standards and stronger recovery mechanisms. The growth in credit from rural, semi-urban, and urban centers, now accounting for 40.4% of total credit, signifies a broadening of the financial inclusion agenda and potential reduction in concentration risk for these banks. However, the proportion of loans priced below 9% grew substantially, reflecting policy transmission but also creating margin pressure.