Whalesbook
Retail Credit Growth Moderates in Q4
The Indian retail lending market experienced a noticeable slowdown in the March quarter of FY26, following a robust festive season. While the overall retail lending portfolio expanded by 16.6% year-on-year to reach Rs 170.2 lakh crore, the sequential growth softened to 4.6%. This indicates a normalization of credit demand after the seasonal surge.
Gold Loans Shine Amidst Broader Slowdown
Gold loans emerged as the star performer, with outstanding portfolios soaring by 50.4% in FY26. This significant growth was fueled by rising gold prices, which increased collateral values, and sustained borrower demand. The segment’s surge contrasts sharply with other areas of retail credit.
Home Loans and Credit Cards Lag
The home loan segment, a key indicator of consumer confidence, expanded by a modest 9.4% year-on-year to Rs 44.4 lakh crore. Growth here was largely attributed to an increase in average loan ticket sizes rather than a rise in the number of new borrowers. Similarly, credit card outstandings remained stagnant year-on-year, even registering a slight sequential dip of 1.1%, underscoring a cautious consumer sentiment towards revolving credit.
Discretionary Spending Cools
Discretionary spending appears to be contracting, as reflected in the auto loan segment. Auto loans saw a significant sequential decline of 11.6%, with two-wheeler loans dropping by 22.1%. Financing for consumer durables also cooled off after the festive demand subsided, pointing towards a broader moderation in non-essential consumption.