Gold loans grew 4x in two years. Credit card balances grew 8%
"EMI nation" is doing the rounds again. RBI's August figures show personal loans growing slower than bank credit as a whole. The fastest growth is in borrowing against gold and fixed deposits.
The 'over a third of income on EMIs' figure comes from a 2025 study of 30 lakh borrowers using digital lenders. RBI's data for 31 August 2026 shows banks' personal loans up 16.9% in a year to ₹72.87 lakh crore, slower than the 18.8% for all bank credit. Loans against gold jewellery grew 83.2% to ₹5.59 lakh crore, 4.2 times their level two years earlier. Credit card balances grew 3.6%.
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"EMI nation" is back on Indian social media this week. The phrase comes from a Times of India feature from October 2025. It quoted a report saying people spend over a third of their income on loan EMIs.
That report has its own limits, and RBI’s figures tell a narrower story than the headline. This piece looks at both.
Where “a third of income” comes from
The figure is from How India Spends, a report by Perfios with PwC India as knowledge partner, released on 19 February 2025.
- It studied the spending of over 30 lakh borrowers.
- Perfios describes them as tech-savvy borrowers who mainly use fintech apps, NBFCs and other digital lenders.
- Their incomes ran from under ₹20,000 to over ₹1 lakh a month, across Tier 3 towns to metros.
Its headline finding: individuals in every city tier put more than 33% of their income towards loan EMIs.
The same report splits their spending three ways. Obligatory spending, which includes EMIs, is 39%. Necessities are 32% and discretionary spending 29%. More than 62% of the discretionary share goes on lifestyle purchases such as fashion and personal care.
Every person in that sample was already a borrower. So the third-of-income figure describes people repaying loans to digital lenders, not every earning Indian.
RBI does not publish what share of income goes to EMIs. It does publish, every month, how much banks have lent and for what. Its latest release covers 31 August 2026.
Personal loans grew slower than the rest
Banks' personal loans stood at ₹72,87,218 crore on 31 August 2026, up 16.9% in a year. All non-food bank credit grew 18.8% over the same period.
So personal loans made up 32.7% of non-food bank credit, against 33.2% a year earlier. Lending to companies, small businesses and NBFCs grew faster.
Where the borrowing went
| Personal loans, 31 Aug 2026 | Outstanding (₹ crore) | Growth in a year | Growth in two years |
|---|---|---|---|
| Housing | 34,54,820 | 11.1% | 21.9% |
| Other personal loans | 17,95,851 | 15.0% | 23.7% |
| Vehicle loans | 7,75,705 | 19.7% | 30.2% |
| Loans against gold jewellery | 5,59,468 | 83.2% | 321.8% |
| Credit card outstanding | 2,99,201 | 3.6% | 8.2% |
| Loans against fixed deposits | 2,04,273 | 43.2% | 67.4% |
| Education | 1,63,555 | 13.2% | 29.7% |
| Consumer durables | 23,295 | 2.4% | -3.6% |
| Loans against shares and bonds | 11,050 | 12.7% | 13.7% |
| All personal loans | 72,87,218 | 16.9% | 30.8% |
Home loans are still the largest piece, at 47.4% of all personal loans.
The gold line
Loans against gold jewellery were ₹1,32,647 crore in August 2024. Two years later they are ₹5,59,468 crore, 4.2 times as much.
Personal loans rose by ₹10.55 lakh crore over the last year. Gold loans supplied ₹2.54 lakh crore of that, or 24.1%, while making up 7.7% of the total.
RBI adds a caution in its notes. Since May 2024, one bank has moved a category of farm loans into the gold-loan line. Part of the jump is a change of label, and RBI does not say how much.
The card line
Credit card balances grew ₹10,510 crore in a year, to ₹2,99,201 crore. That is 1.0% of the rise in personal loans.
Bank loans for consumer durables are smaller than they were two years ago.
Borrowing against what you already own
Three lines in the table are secured on something the borrower holds: gold, fixed deposits, and shares or bonds. Together they supplied 30.1% of the year's rise in personal loans.
- Gold loans grew 83.2%.
- Loans against fixed deposits grew 43.2%, to ₹2.04 lakh crore.
- Bank loans against shares and bonds grew 12.7%, to ₹11,050 crore.
Loans against shares from NBFCs and brokers are not in this table, which covers banks only.
What the figures do not show
- EMIs against income. RBI's table counts loans outstanding, not what share of anyone's pay goes to repaying them.
- NBFCs and fintech lenders. The data covers 41 banks with about 95% of bank credit. Loans from NBFCs to individuals sit outside it.
- Why people borrowed. A gold loan can pay for a wedding, a business or a hospital bill. The table does not say which.
- Exact twelve-month periods. From December 2025, RBI reports the last day of the month. The year-earlier figure it compares with is from 22 August 2025.
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Questions
- Are Indians borrowing more through personal loans?
- Yes. Banks' personal loans grew 16.9% in the year to 31 August 2026, to ₹72.87 lakh crore, by RBI's data. All non-food bank credit grew faster, at 18.8%.
- How fast are gold loans growing in India?
- Bank loans against gold jewellery grew 83.2% in the year to 31 August 2026, to ₹5.59 lakh crore. That is 4.2 times their level in August 2024. RBI notes that one bank reclassified some farm loans into this line from May 2024.
- Is credit card debt rising fast in India?
- Not in RBI's bank data. Credit card outstanding grew 3.6% in the year to 31 August 2026, to ₹2.99 lakh crore, and 8.2% over two years.
- Do Indians spend a third of their income on EMIs?
- The figure comes from How India Spends by Perfios and PwC India (February 2025), which studied over 30 lakh borrowers who mainly use fintech apps, NBFCs and digital lenders. It found they put more than 33% of their income towards EMIs. RBI’s bank data does not measure EMIs against income.
- What is the biggest kind of personal loan in India?
- Home loans, at ₹34.55 lakh crore on 31 August 2026, or 47.4% of banks' personal loans.
Sources
- RBI, Sectoral Deployment of Bank Credit, August 2026, press release 2026-2027/1219 (30 Sep 2026)
- RBI, Statement 1: Deployment of Gross Bank Credit by Major Sectors, data to 31 Aug 2026 (30 Sep 2026)
- Times of India, EMI nation: Many Indians are shopping their way to debt (25 Oct 2025)
- Perfios, How India Spends: report with PwC India, findings and sample (19 Feb 2025)
Compound is analysis, not investment advice. Reva Money is not a SEBI-registered investment adviser.
