Gold loans jump 94% y-o-y, fuel bank credit growth in Q1

MUMBAI: Gold loans drove a sharp acceleration in personal lending and overall bank credit, with the segment expanding 93.8% year on year at the end of June 2026, as banks added Rs 74,171 crore in Q1FY27 to take the gold loan book to Rs 5.4 lakh crore.The expansion in gold loans accounted for 13.1% of the Rs 5 lakh crore incremental non-food credit during the quarter, which pushed total non-food credit to Rs 219.4 lakh crore. Overall bank credit rose 18.6% year on year to cross Rs 219.3 lakh crore at the end of the first quarter.Credit to industry recorded a 19.2% increase, the highest first-quarter growth in recent years, taking outstanding loans to Rs 47.7 lakh crore. This was led by large industries, where credit grew 16.6% to Rs 32.2 lakh crore, and medium enterprises, where advances rose 30% to Rs 4.7 lakh crore.Within industry, petroleum, power and engineering accounted for the largest share of incremental lending. Each of these sectors saw loan book expansions of around Rs 25,000 crore, together contributing 41% of incremental bank credit in the quarter. Overall, credit to industry increased by Rs 1.9 lakh crore during the period.Advances to the services sector grew 21.4% year on year, while personal loans expanded at a slower 15.8% compared with overall credit growth. Growth moderated across most personal loan segments relative to Q1FY26 levels, except for vehicle loans. Vehicle loans rose 17.3% to Rs 7.5 lakh crore at the end of June 2026, nearly double the 9.2% growth recorded a year earlier. Loans against gold jewellery remained the fastest-growing segment within personal loans, rising 93.1% year on year to Rs 3.6 lakh crore, an increase of Rs 1.72 lakh crore from June 2025 levels.Among industrial segments, medium enterprises recorded the fastest growth at 30.2%, with outstanding credit rising by Rs 1.2 lakh crore to Rs 5.1 lakh crore. Petroleum, coal products and nuclear fuels led sub-industry growth at 48.6%. In the services sector, credit to non-banking financial companies expanded 22.8% year on year, with outstanding loans increasing by Rs 3.8 lakh crore to Rs 20.6 lakh crore. Commercial real estate and trade followed, with growth rates of 21.4% and 18.7%, respectively.Incremental bank credit rose by Rs 7.2 lakh crore, or 3.4% quarter on quarter, during Q1FY27. Services led the increase, contributing Rs 3.2 lakh crore or 43.8% of the total incremental credit, followed by industry at Rs 2.5 lakh crore or 34%. Within segments, NBFCs accounted for the largest addition to credit during the quarter, with an increase of Rs 1.2 lakh crore. Loans against gold jewellery led growth within personal loans on a sequential basis, contributing Rs 0.5 lakh crore in Q1FY27.Get the latest Business News and Live updates. Download the TOI app.