Whalesbook
Loan originations for cars and two-wheelers saw a sharp decline in the first quarter of fiscal year 2026, ending March 31. Auto loan originations fell 11.6% to Rs 1.05 lakh crore, while two-wheeler loan originations experienced a steeper 22% drop to Rs 29,800 crore.
This downturn follows a strong December quarter that saw a demand surge, attributed to GST rationalization and festive season buying. In contrast, gold loan originations demonstrated robust growth, increasing by 50.4% over fiscal year 2026.
Lenders have shown increased confidence in gold as a lending asset, partly driven by rising prices for the precious commodity. Despite concerns about potential asset quality issues due to price fluctuations, especially with the West Asia conflict, data suggests these fears are unfounded. Asset quality has improved, with only 1.2% of gold loans remaining unpaid between 31 and 180 days, a decrease from 2% a year prior.
Overall retail loans grew 16.6% to Rs 170 lakh crore in FY26. Stressed advances across the retail loan portfolio reduced to 2.7%. Home loans, however, saw a more modest growth of less than 10% in the same fiscal year.