The credit landscape in India has witnessed a significant shift during the final quarter of the financial year 2025-26. According to the latest report released by the credit information company CRIF High Mark, there has been a notable decline in the disbursement of loans for vehicles and two-wheelers during the January-March 2026 period. This trend comes after a period of strong growth observed in the preceding December quarter, suggesting a cooling off in the demand for automobile financing across the country.
Sharp Decline in Vehicle and Two-Wheeler Loan Disbursements
05 lakh crore. The impact was even more pronounced in the two-wheeler segment, where loan disbursements plummeted by 22 percent, reaching a total of 29,800 crore. Industry experts attribute this downturn to a high base effect from the October-December quarter of the previous year. During that period, the festive season, coupled with GST rate reliefs and pent-up demand, had led to a massive surge in vehicle sales and subsequent financing. As the market stabilized in the following quarter, the figures showed a natural decline when compared to the exceptional highs of the festive months.
Resilience in the Overall Loan Portfolio
Despite the drop in fresh disbursements, the overall loan portfolio remains on a growth trajectory, while 4 percent on a quarterly basis. 7 percent. This suggests that while new loan originations have slowed down, the existing pool of loans and ongoing repayments continue to expand the total size of the credit market in these segments. It reflects a steady accumulation of debt over the longer term, even if short-term fluctuations occur in quarterly disbursements.
Retail Credit Growth and Improved Asset Quality
The broader retail credit market in India showed strong performance throughout the financial year 2025-26.6 percent, reaching a staggering 170 lakh crore. One of the most positive takeaways from the report is the improvement in asset quality. There has been a visible reduction in stressed or bad loans during this period, indicating that borrowers are becoming more disciplined in their repayment schedules. This reduction in non-performing assets (NPAs) provides a cushion for the banking and non-banking financial sectors, signaling a healthy credit environment despite the slowdown in specific sectors like automobiles.
The Phenomenal Rise of Gold Loans
The most striking finding of the report is the explosive growth in gold loans. 4 percent. This surge stands in stark contrast to other segments like home loans, which recorded a growth rate of less than 10 percent. Analysts believe that the primary drivers behind this gold loan boom are the record-high prices of gold and the relatively simple and quick processing involved in securing these loans. As the value of gold increases, borrowers are able to secure higher loan amounts for the same quantity of gold, making it an attractive and accessible financing option for many. The ease of liquidity provided by gold loans has clearly outpaced traditional long-term financing options like housing loans in the current economic climate.