NBFC lending in India rose 14.2% year-on-year to Rs 58.6 lakh crore at end-May 2026, trailing the 17.7% growth rate of banks, according to RBI data cited by Times of India. The central bank, for the first time, published data on sectoral deployment of NBFC credit, revealing that retail loans drove almost the entire expansion while industry credit shrank.
Growth trends and composition The 14.2% annual growth marks a pickup from 11.4% a year earlier. The acceleration was aided by a surge in loans against gold jewellery, which expanded 6% in the two months to May and 70% year-on-year to Rs 3.3 lakh crore. Between March and May 2026, NBFCs added Rs 84,544 crore in credit, a 1.5% increase that is roughly twice the pace of bank lending over the same period. Banks typically see slower credit growth in the first quarter as companies repay dues after year-end balance-sheet adjustments.
Incremental credit breakdown Of the Rs 84,544 crore added, retail loans accounted for Rs 81,161 crore, taking the segment's outstanding stock to around Rs 25.2 lakh crore. In contrast, credit to industry shrank by Rs 17,424 crore, dragged down by infrastructure lending which fell by Rs 18,092 crore, including a Rs 9,553 crore decline in the power segment.
| Sector | Incremental Credit (Rs crore) | Share of Total Incremental |
|---|---|---|
| Retail | 81,161 | ~96% |
| Services | 10,116 | 11.97% |
| Agriculture | 2,766 | 3.3% |
| Other loans | 7,923 | 9.37% |
| Industry | -17,424 | - |
| Source: RBI data via Times of India |
Retail loan components Within retail, growth is led by collateralised borrowing. Loans against gold jewellery contributed Rs 19,808 crore, or 23.4% of incremental credit. Other retail sub-segments include vehicle loans (Rs 13,840 crore), housing loans (Rs 13,413 crore), and consumer durables (Rs 9,991 crore).
Services added Rs 10,116 crore, with commercial real estate accounting for most of the increase at Rs 11,834 crore, offsetting a marginal Rs 90 crore decline in transport operators. Other loans contributed Rs 7,923 crore, while agriculture and allied activities added Rs 2,766 crore.
Implications for treasury and finance professionals For CFOs and treasury directors tracking NBFC exposure, the data signals a shift toward retail and away from industrial lending. The concentration of incremental credit in gold loans and housing suggests NBFCs are prioritizing secured, high-yield assets. The contraction in infrastructure lending, especially power, may indicate tighter risk appetite or refinancing by banks. Finance executives should monitor NBFC asset quality in retail segments, particularly gold loans, which have grown rapidly but carry commodity price risk. The slower overall NBFC growth relative to banks could affect availability of trade finance and working capital from shadow banks, especially for industrial borrowers.
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