MUMBAI: Lenders shifted toward secured credit and established borrowers in Q2 FY26, reflecting a tactical move toward asset quality and risk control. According to the CRIF High Mark report, banks and NBFCs increased exposure to secured products, reduced lending to new borrowers, and expanded credit selectively to businesses, especially sole proprietors.Gold loans recorded the fastest growth among major retail products. The portfolio rose 35.8% YoY and 8.6% QoQ to Rs.14,50,000 crore in Sep 2025. Origination value grew 53.0% YoY, and loans above Rs.5,00,000 accounted for the largest share at 30.3% of value. Asset quality improved across lenders because the loans are backed by collateral and subject to tighter norms.“With regulators and banks tightening norms on unsecured lending, especially in the personal and microfinance segments, many individuals and small businesses are turning to gold loans as a reliable and convenient financing option,” said George Alexander Muthoot, MD, Muthoot Finance.Home loans continued to expand, with the portfolio rising 11.1% YoY and 2.1% QoQ to Rs.42,10,000 crore. The average ticket size stood at Rs.33.2 lakh from in Q2 FY26 up sharply from Rs 31.4 lakh in the preceding quarter and Rs 31 lakh a year ago . Loans above Rs.75,00,000 made up 39.4% of origination value, up from 35.0% a year earlier. PSU banks led this shift and held 50.0% of total origination value, overtaking private banks.Lenders curtailed unsecured credit expansion and became more selective about new-to-credit borrowers. The new-to-credit (NTC) share fell across products. Credit card issuance continued a two-year decline, dropping to 44.0 lakh in the quarter. Anil Rawat, risk head for consumer durables, credit cards, and personal loans at IDFC FIRST Bank, said, “Credit card originations fell in FY25, following two years of high growth, as lenders are becoming ever more selective and tech-driven, balancing growth with risk prudence.“Despite tighter standards for unsecured loans, business credit expanded. Loans to sole proprietors grew 24.6% YoY and 6.0% QoQ, taking the portfolio to Rs.46,70,000 crore. Origination value rose 11.4% YoY and 15.9% QoQ to Rs.4,75,100 crore, indicating strong demand in small enterprises.Personal loans entered a more measured phase. The portfolio grew 12.0% YoY, and origination value rebounded 32.0% QoQ to Rs.2,92,000 crore. PSU banks drove growth in loans above Rs.10,00,000, which formed 37.4% of value. NBFCs dominated volume with a 91.4% share, reflecting their focus on smaller loans. Manhish Kumar Gupta, chief executive for urban unsecured assets, payments and partnerships at L&T Finance, said, “India’s personal loan industry has shifted from high-velocity growth to disciplined, quality-first expansion.“Vehicle finance showed a revival. Auto loan portfolios grew 16.3% YoY, and originations rose 17.7% QoQ. Vivek Chopra, COO-retail at Tata Capital, said, “GST 2.0 materially recalibrated vehicle affordability, favorable harvest after strong monsoon led to pent up rural demand and lastly, reinforced demand due to early festive pull-through and positive sentiments.” Two-wheeler loan portfolios grew 14.9% YoY, with borrowers moving toward higher-value vehicles. Loans in the Rs.1,00,000 to Rs.1,50,000 range increased their share from 21.2% to 29.0% over two years.Asset quality improved in mid-stage delinquency buckets, but stress persisted in select segments. Auto loans were the only major category where the portfolio-at-risk (PAR) in the 31-180 days overdue bucket worsened, rising from 2.8% to 3.1%, driven by higher NBFC delinquencies. Two-wheeler loans recorded a PAR 31-180 of 5.5%, mainly in rural and MFI-linked segments. Credit cards had the highest delinquency at 4.1%. Private banks saw PAR 31-90 inch up to 2.25% but recorded improvement in PAR 91-180.