India NBFC Loans Rise 14.2% Driven by Gold Credit

The Reserve Bank of India reported that credit extended by non-banking financial companies (NBFCs) grew 14.2% year-on-year to Rs 58.61 lakh crore by the end of May 2026. This represents an acceleration from the 11.4% growth recorded the previous year, though it remains lower than the 17.7% growth pace seen in the banking sector.

Retail loans acted as the primary engine for this expansion, growing 19.5% year-on-year. Loans against gold jewellery saw the most dramatic spike, surging 69.9% to Rs 3.29 lakh crore due to rising gold prices and increased adoption in West Bengal and Uttar Pradesh. Commercial real estate also grew significantly by 40.2% to Rs 1.196 lakh crore. In other sectors, agriculture credit jumped to 17.9% from 5.0% a year prior, while the services sector moderated to 16.7% and industry lending slowed to 7.3%.

To mitigate risk, the Reserve Bank of India has implemented strict limits on loan rollovers. These measures include banning the evergreening of loans without fresh appraisals and requiring full repayment of bullet loans within 12 months. Muthoot Finance emerged as the largest player in the gold loan segment, reporting Rs 1.65 lakh crore in loans for FY26.