New Delhi, Sep 7 (IANS) Loans against gold jewellery extended by non-banking financial companies (NBFCs) grew 68.5 per cent year-on-year in July 2026, continuing the strong growth momentum witnessed in the segment over the past several months, according to data released by the Reserve Bank of India (RBI) on Monday.
Gold loan growth stood at 69.3 per cent in June, while the segment had recorded a 43.9 per cent year-on-year increase in July 2025. The sustained expansion comes amid a sharp rise in gold prices over the past few quarters, which has increased the value of collateral available against such loans.
The strong growth in gold-backed lending also reflects the comfort of lenders with the segment, as the loans are secured against high-value assets. Gold jewellery, in particular, has traditionally remained a readily acceptable form of collateral because of its liquidity and established resale value.
However, the rapid expansion of lending against gold has also raised concerns about the increasing use of credit for consumption rather than for productive purposes or asset creation. The trend has prompted closer attention to the nature of borrowing and the purposes for which households are raising funds.
Loans for consumer durable purchases also registered robust growth during the month. Credit in this category expanded 51.5 per cent year-on-year in July, accelerating from 46.8 per cent in June and significantly higher than the 18.8 per cent growth recorded in July last year.
Housing credit extended by NBFCs, including housing finance companies, grew 11.9 per cent year-on-year in July. This was slightly higher than the 11.4 per cent growth recorded in June and substantially above the 4 per cent expansion seen in July 2025.
Vehicle loans, meanwhile, remained broadly stable, growing 15.1 per cent in July compared with 15.2 per cent in June and 15.3 per cent in the year-ago month.
Overall retail credit extended by NBFCs and housing finance companies grew 21.4 per cent year-on-year in July, reflecting continued strength in household borrowing despite variations across different loan categories.
On the sectoral lending front, credit growth to the services sector moderated to 15.2 per cent in July from 17.6 per cent in June and 24.5 per cent in July 2025, according to the RBI data.
–IANS
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