Non-banking finance companies in India reported a robust 14.4% rise in credit during June, driven by record retail borrowing and a sharp increase in gold-backed loans, amidst tighter funding conditions.
Non-banking finance companies in India extended credit at a brisk pace in June, with Reserve Bank of India data showing lending rose 14.4% from a year earlier to ₹59.3 lakh crore. That was faster than the 11.1% growth recorded a year earlier and reflected the continued strength of retail borrowing, which remains the main engine of expansion for the sector, according to the RBI and industry reporting.
Retail loans increased 20.3% year on year to ₹25.61 lakh crore, outpacing overall NBFC credit growth and building on the trend seen in May, when retail lending also led the advance. The RBI’s newly released monthly sectoral data show that housing, vehicle finance and loans backed by gold jewellery were among the strongest categories.
Loans against gold jewellery stood out again, surging 69.3% to ₹3.4 lakh crore in June. That takes the category to more than twice its level in June 2024, highlighting how households have increasingly tapped gold as collateral amid sustained demand for quick-access credit. The latest figures also suggest that NBFCs are leaning more heavily on consumer-facing segments even as lending patterns broaden across the industry.
The June update follows a year in which NBFC credit remained in double-digit growth, supported by upper-layer lenders and long-term borrowings. Financial Express reported that NBFC credit growth in FY24 reached 18.5%, while bank lending to NBFCs slowed in 2024 after higher risk weights raised funding costs. That backdrop makes the June numbers notable: despite tighter funding conditions, NBFCs are still expanding steadily, with retail demand keeping momentum intact.
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