Kamal Ghorui
MUMBAI: Gold loans have emerged as the top product in new originations and the second-largest retail credit book in India at Rs 16 lakh crore, trailing only home loans at Rs 44 lakh crore, according to credit bureau TransUnion Cibil, even as consumer durable loans, largely for mobile phones, have become the main entry point for first-time borrowers, replacing two-wheelers and priority sector loans.
According to TransUnion Cibil’s credit market indicator report, credit markets improved in the third quarter of FY26. Demand rose on the back of GST rate cuts and festive season spending, while a sharp increase in gold loans boosted credit supply as gold prices surged. Lenders improved asset quality through a shift towards higher ticket loans, seasoned borrowers and those with stronger credit scores, resulting in lower delinquencies.Delinquencies declined across most retail segments. Unsecured categories including credit cards, personal loans and consumer durables saw improvement, while secured segments such as home loans and auto loans also reported lower delinquencies. Personal loan delinquencies have declined steadily since Sept 2025, while home loan delinquencies remained stable at low levels of 0.7% to 0.8%.Some segments continue to show relatively higher stress levels. Commercial vehicles recorded delinquency levels of around 2%, construction equipment stood at 1.2%, and micro loan against property remained elevated at around 3%, although these levels have remained stable.Commenting on the outlook for the fourth quarter of FY26, Jain said that after the festive season, demand has “normalised” in Jan and Feb 2026. Early indicators for Jan show continued improvement in delinquency rates, suggesting that the credit market indicator may strengthen further in the final quarter of the fiscal year.In retail credit market, gold loans account for nearly one-third of all new loan originations. As gold prices doubled, ticket sizes for gold loans increased by 1.8 times.
