India’s retail lending portfolio expanded sharply in the third quarter of FY26, reaching ₹162.7 lakh crore, marking an 18.1 per cent year on year growth, according to a report released on Tuesday by CRIF High Mark.
The report shows that the retail credit ecosystem continues to deepen, supported by rising originations, improved asset quality, and broader participation across geographies and borrower segments. Active loan accounts stood at 690 million during the quarter, reflecting sustained credit demand.
Asset Quality Strengthens as Portfolio at Risk Declines
The improvement in asset quality was visible in the Portfolio at Risk metric. Loans overdue between 31 to 180 days declined to 3.1 per cent in Q3 FY26, compared with 3.6 per cent in the same quarter a year earlier.Quarterly originations rose 41 per cent year on year to ₹25.3 lakh crore, underscoring robust disbursement activity across retail categories.
Gold Loans, Auto, and Two-Wheelers Drive Momentum
Gold loans emerged as one of the strongest performing segments, with originations surging 90.3 per cent year on year. The rally in gold prices contributed significantly to this spike.Policy measures also influenced credit trends. Rationalisation of GST rates led to a 46.7 per cent quarter on quarter surge in two wheeler loan originations, while auto loans recorded a 22.1 per cent sequential rise. Festive season demand further supported growth in consumer durable loans, which increased 14.7 per cent quarter on quarter.
Premiumisation Trend Gains Ground in Home and Gold Loans
The report highlighted a clear premiumisation trend across categories.The average ticket size for home loans rose 6.4 per cent quarter on quarter to ₹33 lakh. Loans above ₹75 lakh accounted for 40 per cent of total home loan originations in Q3 FY26, up from 35 per cent in the previous year.
A similar pattern was visible in gold loans. Loans exceeding ₹5 lakh contributed 36.5 per cent of total origination value, compared to 24 per cent in Q3 FY25, indicating a shift toward higher value borrowing.
NBFCs and PSU Banks Sharpen Segmental Focus
Non banking financial companies strengthened their dominance in high velocity retail segments. NBFCs accounted for 30.7 per cent of gold loan origination value in Q3 FY26 and 91.1 per cent of personal loan volumes.Public sector banks continued to consolidate their position in secured lending. They accounted for 50.3 per cent of total originations during the quarter, compared to 23.3 per cent for private banks. PSU banks also held a 45.8 per cent share in gold loan origination value, supported by enhanced digital capabilities and competitive pricing strategies.
Private banks maintained their focus on home loan originations, while PSU lenders expanded their strategic presence across secured credit segments.
Non Metro Growth Signals Deeper Credit Penetration
Credit growth in non metro cities gathered pace, particularly in mass market products such as personal loans, two wheelers, and consumer durables.The trend reflects expanding access to formal credit channels and rising borrower participation in semi urban and rural regions. The report notes that this shift indicates broader financial inclusion and a deepening retail credit landscape beyond metropolitan centres.
With rising originations, improved asset quality, and growing premiumisation, India’s retail lending sector continues to demonstrate resilience and structural expansion in Q3 FY26.
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