Gold loans swell 105%, services pip personal loan growth

MUMBAI: :Gold loans continued to expand at a triple-digit pace in the 12 months up to May 2026, even as housing loan growth slowed to 10.9%, pulling overall personal loan growth down to 15.4% and leaving it trailing a 20% rise in services credit.

The services sector increased its share of bank loans driven by a 33% surge in lending to non-banking finance companies (NBFCs), according to sectoral data released by RBI. Loans against gold jewellery rose 105.5% year-on-year to about Rs 5.1 lakh crore as of May 31, 2026, sharply outpacing the 15.4% increase in total personal loans to nearly Rs 70.2 lakh crore. This divergence lifted the share of gold loans within personal loans to 7.3%, up from 1.97% in May 2024 and 4.1% in May 2025, an increase of 5.4 percentage points over two years.

Between May 2025 and May 2026, gold loans accounted for nearly 28% of the incremental growth in personal loans, despite remaining a relatively small portion of the overall stock. Yet the strength of gold loans has not been sufficient to offset a broader cooling in large retail segments. Housing loans, the dominant component of personal credit, grew only about 11% while credit card outstanding rose 1.3% and consumer durable loans contracted 2.6%.

Other personal loans expanded 12.5%, all below overall bank credit growth of 17.7%, resulting in a decline in the share of personal loans in total bank credit to 32.6% in May 2026 from 33.3% a year earlier. By contrast, services credit accelerated, rising 20.4% to Rs 60.5 lakh crore and increased its share of total bank credit to 28.1% from 27.5% a year ago. The expansion was led by NBFC lending, which grew 33.7%.