The share of new-to-credit (NTC) borrowers dropped year-on-year across loan products, barring the consumer durable segment, for the October–December quarter, a report said on Tuesday.
The NTC share in consumer durable loans rose to 16.3% from 16.2% a year earlier, according to the CRIF High Mark’s December report.
Two-wheeler loans continued to have the highest NTC share at 38.3%, though this marked the sharpest decline from 41.2% a year ago. Auto and housing loans recorded moderate NTC penetration of 9–10%. The NTC share in gold and personal loans fell to below 5% while the same for credit cards was stable at 8.5%.
India’s retail lending portfolio
Overall, India’s retail lending portfolio expanded to Rs 162.7 lakh crore, up 18.1% year-on-year, with 690 million active loan accounts, the report said. The asset quality improved, with portfolio-at-risk (PAR) 31–180 days declining to 3.1% from 3.6% a year earlier. Quarterly originations for the period under review rose 41% year-on-year to Rs 25.3 lakh crore.
The average ticket size for home loans increased 6.4% quarter-on-quarter to Rs 33 lakh, with loans above Rs 75 lakh accounting for 40% of originations, compared with 35% a year ago. A similar premiumisation trend was visible in gold loans, where loans above Rs 5 lakh contributed 36.5% of total value, up from 24% in Q3FY25. Gold loan originations more than doubled during the quarter, driven by a rally in gold prices.
The rise in ticket sizes explains the divergence between volume and value growth. Home loan volumes grew 4.1% year-on-year, while portfolio value expanded 10.5%, indicating that the growth was largely driven by higher-value loans. In contrast, personal loans recorded a 13.5% growth in volumes but 11.6% in value, reflecting increased penetration of smaller-ticket loans.
Higher-ticket loans continued to exhibit stronger credit performance
The report noted that higher-ticket loans continued to exhibit stronger credit performance. Personal loans above Rs 5 lakh reported PAR 91–180 below 1%, while smaller-ticket loans showed relatively higher delinquency levels, reinforcing the growing correlation between the ticket size and asset quality.
Public sector banks continued to strengthen their presence in secured lending. They outpaced private banks in home loan origination value (50.3% versus 23.3%), particularly in the above Rs 75-lakh segment. PSBs also maintained a strong share in gold loan origination value at 45.8%, supported by enhanced digital capabilities and competitive pricing.
GST rate rationalisation triggered a 46.7% quarter-on-quarter surge in two-wheeler originations and a 22.1% rise in auto loans. Festive demand also supported consumer durable loans. Sole-proprietor loans grew 26.2% year-on-year, reflecting robust appetite for MSME credit amid the economic recovery.
Non-bank lenders strengthened their position in high-velocity segments. In gold loans, their share of origination value rose to 30.7% in the December quarter from 22.8% in the previous quarter, while accounting for nearly half of volumes. In personal loans, NBFCs maintained a dominant 91.1% share of volumes.
The asset quality improved across key categories. Gold loans saw PAR 31–180 decline to 1.8% from 2.4% a year earlier, while consumer durable loans improved to 1.9% from 2.7%. Home loan PAR 31–90 improved to 2.1% from 2.3% a year ago. The early delinquency bucket for personal loans remained broadly stable, with PAR 31–90 steady at 1.5% as of December 31.