India's non-banking financial companies experienced a robust 14.2 per cent year-on-year credit growth in May, with gold loans and commercial real estate emerging as the primary catalysts, according to the latest Reserve Bank of India data.
Key Points
- NBFCs recorded a 14.2 per cent year-on-year credit growth in May, reaching an outstanding credit of Rs 58.61 trillion.
- Loans against gold jewellery saw the sharpest increase, surging by 69.9 per cent to Rs 3.30 trillion.
- Commercial real estate credit climbed 40.2 per cent to Rs 1.20 trillion, marking the strongest growth within the services segment.
- Retail loans continued to be a major driver, growing 19.5 per cent and accounting for nearly 43 per cent of the total loan book.
- Credit growth to industry slowed to 7.3 per cent, largely due to weaker growth in infrastructure lending.
Loans against gold jewellery and commercial real estate (CRE) emerged as the fastest-growing segments in non-banking financial companies' (NBFCs') loan books in May, as overall credit growth accelerated to 14.2 per cent year-on-year (Y-o-Y), driven by robust retail lending and higher credit to agriculture, Reserve Bank of India (RBI) data showed on Tuesday.
Outstanding credit by major NBFCs and housing finance companies (HFCs) stood at Rs 58.61 trillion at the end of May, compared with Rs 51.32 trillion a year earlier.
The growth of 14.2 per cent was higher than the 11.4 per cent recorded in May 2025.
Key Growth Drivers
Among individual loan categories, loans against gold jewellery registered the sharpest increase, rising 69.9 per cent Y-o-Y to Rs 3.30 trillion from Rs 1.94 trillion a year earlier.
Consumer durable loans followed with a 42 per cent increase to Rs 68,814 crore, while credit to commercial real estate climbed 40.2 per cent to Rs 1.20 trillion, the strongest growth within the services segment.
Retail loans continued to anchor NBFC credit growth, rising 19.5 per cent Y-o-Y to Rs 25.20 trillion, and accounting for nearly 43 per cent of the sector's outstanding loan book.
The pace of growth accelerated from 14.9 per cent a year earlier.
Sectoral Performance
Within retail lending, housing loans, including those extended by HFCs, grew 10.9 per cent Y-o-Y to Rs 8.35 trillion, more than double the 5.1 per cent growth recorded in May 2025.
Vehicle loans increased 14.8 per cent to Rs 6.18 trillion, marginally slower than the 16.3 per cent growth recorded a year earlier.
Credit to agriculture and allied activities also accelerated sharply, rising 17.9 per cent Y-o-Y to Rs 80,325 crore, compared with 5 per cent growth in the corresponding month last year.
Areas of Moderation
In contrast, credit growth to industry slowed to 7.3 per cent from 10 per cent in May 2025, largely reflecting weaker growth in infrastructure lending.
Infrastructure credit, which accounts for over 90 per cent of industrial loans in the NBFC sector, grew 5.8 per cent Y-o-Y, down from 9.3 per cent a year earlier.
Lending to the power sector, the largest component within infrastructure, also moderated to 5.8 per cent from 13 per cent.
Credit to the services sector grew 16.7 per cent Y-o-Y, slower than the 23.9 per cent growth recorded a year ago.
While commercial real estate continued to post strong growth, credit to trade moderated to 16.7 per cent from 27.8 per cent, and lending to transport operators slowed to 9 per cent from 11.7 per cent.
Other loans, which include lending by NBFCs outside the four broad sectors, and non-housing loans by HFCs rebounded to record 17.9 per cent Y-o-Y growth after contracting 18.7 per cent in May 2025.
The RBI data is based on a sample of NBFCs in the upper and middle layers, and HFCs, covering around 87 per cent of the sector's outstanding credit.
