MUMBAI: Consumer demand appears to be losing momentum, with loans for consumer durables and credit card outstandings growing just 2.4% and 3.6% year on year, respectively, in Aug. At the same time, banks have seen strong demand for secured borrowing, with gold loans adding Rs 98,096 crore in the first five months of FY27, almost matching the Rs 98,858 crore added through home loans.

According to RBI sectoral credit data, bank credit rose by about Rs 10.3 lakh crore, or 4.8%, between April and Aug 2026, taking outstanding credit to Rs 223.9 lakh crore. While overall credit grew 19.1% year- on-year, the composition of incremental lending during the first five months of FY27 shows weaker growth in discretionary consumer credit and stronger demand for secured retail loans, corporate credit and lending to NBFCs.Credit card outstandings rose to about Rs 3 lakh crore in Aug but added only Rs 4,740 crore during the first five months of FY27. Consumer durable loans stood at Rs 23,295 crore, adding just Rs 1,333 crore during the period. Vehicle loans remained stronger, growing 19.7% year on year to Rs 7.8 lakh crore and adding Rs 37,027 crore between April and Aug.Gold loans were a major source of retail credit growth. Outstanding loans against gold jewellery rose 83.2% year-on-year to Rs 5.6 lakh crore in Aug from about Rs 3 lakh crore a year earlier. The Rs 98,096 crore increase in gold loans accounted for 9.6% of incremental bank credit during the five months, almost matching the 9.6% share of home loans. Advances against fixed deposits also rose 43.2% year on year to Rs 2 lakh crore, adding Rs 35,166 crore during the period.The broader personal loan category added Rs 3.5 lakh crore, accounting for 33.9% of incremental bank credit. Outstanding retail credit stood at Rs 72.9 lakh crore in Aug, up 16.9% year-on-year. Services accounted for Rs 2.4 lakh crore, or 23%, of incremental credit. Bank lending to NBFCs rose 37.5% year-on-year to Rs 21.6 lakh crore, with their borrowings from banks increasing by Rs 93,870 crore. Lending to public financial institutions rose 83.7%.