Summary of this article
* India’s retail credit momentum remained strong during Q2 FY26
* Secured lending surged, led by gold loans, a sharp rebound in home loan originations, and renewed strength in auto loans
* PSU banks expanded their dominance across home, personal, and auto loans
* Consumer-durable and two-wheeler loans softened sequentially due to seasonality, even as credit card delinquencies improved despite slower issuances
India’s credit cycle remains firmly on a growth trajectory, with borrowers increasingly shifting toward secured and large-ticket loans. According to CRIF High Mark’s September 2025 edition of How India Lends report, the lending ecosystem is demonstrating resilience, disciplined underwriting, and strong festive-season recovery across key retail products.
As per the report, India’s retail credit momentum remained strong during Q2 FY26, supported by a continued shift toward secured lending, rising demand for large-ticket loans, and deeper participation from PSU banks and NBFCs. Gold loans posted the fastest growth, while home and auto loans rebounded sharply with the onset of the festive season.
In contrast, consumer-durable and two-wheeler loans saw a sequential dip due to seasonal factors. Credit card issuances continued their calibrated moderation, even as portfolio quality improved. Most product categories showed tighter underwriting standards, reflected in a decline in the share of new-to-credit (NTC) borrowers.
Key Highlights:
Sustained Consumption Lending: Retail and consumption loan outstandings rose 18 per cent YoY and 4.5 per cent QoQ, led by strong growth in gold loans (+35.8 per cent YoY, 8.6 per cent QoQ), auto loans (+16.3 per cent YoY, 2.9 per cent QoQ), and two-wheeler loans (~15 per cent YoY, 2.02 per cent QoQ). Lending to sole proprietors continued to accelerate, up 24.6 per cent YoY and 6.0 per cent QoQ to Rs 46.7 lakh crore.
Home Loans: Origination values rebounded sharply to Rs 3.02 lakh crore (+25 per cent QoQ), driven by an 18 per cent rise in loan volumes and a notable shift toward high-value credit. Loans of Rs 75 lakh and above now make up 39.4 per cent of originations. PSU banks strengthened their leadership, increasing market share to 50 per cent.
Personal Loans: Portfolio outstandings grew 12 per cent YoY and 2.9 per cent QoQ, supported by a robust recovery in originations to Rs 2.92 lakh crore (+32% QoQ). Large-ticket loans above Rs 10 lakh rose to 37.4 per cent of origination value, driven primarily by PSU banks, while NBFCs continued to command nearly 90 per cent of small-ticket loan volumes.
Auto Loans: The auto loan portfolio increased 16.3 per cent YoY and 2.9 per cent QoQ, with originations climbing to Rs 96,000 crore (+15.9% QoQ) after two subdued quarters. The average ticket size rose to Rs 8.7 lakh. PSU banks expanded their share to 40.4 per cent, while NBFCs retained a strong hold on volumes.
Two-Wheeler Loans: The portfolio grew close to 15 per cent YoY, with POS up 2.2 per cent QoQ. Originations softened sequentially, with value down 4.9 per cent QoQ and volumes down 8.3 per cent QoQ due to monsoon-linked seasonality. Higher-value two-wheeler loans in the Rs 1–1.5 lakh segment continued to gain traction.
Consumer Durables & Credit Cards: Consumer durable loan originations moderated to Rs 43,500 crore (-6.8 per cent QoQ) though YoY growth remained healthy at 19 per cent. Credit card issuances continued to slow, dipping to 44 lakh, even as outstanding balances touched Rs 3.5 lakh crore (+9% YoY) and delinquencies improved across key risk buckets.
Gold Loans: Gold loans remained the fastest-growing segment, with outstandings up 35.8 per cent YoY and 8.6 per cent QoQ. Origination values rose 53 per cent YoY and 1.2 per cent QoQ to Rs 604.7 crore in Q2 FY26. The average ticket size increased to Rs 1.64 lakh, and asset quality improved across PSU banks, private banks, and NBFCs.
Commenting on the findings, Sachin Seth, Chairman, CRIF High Mark and Regional Managing Director – CRIF India & South Asia, said, “The credit ecosystem continues to demonstrate resilience and discipline. We are seeing healthy demand for home, auto, and gold loans, alongside improved credit card outstandings and elevated performance metrics across lender segments. This quarter’s findings reaffirm that India’s retail credit cycle is on stable footing, supported by a decisive shift toward secured lending and more responsible underwriting. How India Lends aims to decode these shifts and equip lenders and policymakers with actionable intelligence.”
