Public sector banks (PSBs) have upped their game on individual housing loans (IHLs) increasing their share to 44.11 per cent of the total outstanding IHLs as on March-end 2025 against 42.77 per cent as on March-end 2024, even as private sector banks lost market share.
During the same period, private sector banks’ (PvBs) market share in outstanding IHLs declined to 35.97 per cent from 37.51 per cent, per latest NHB (National Housing Bank) data.
Market experts attribute PSBs’ increased market share to their ability to offer loans cheaper due to access to relatively cheaper deposits and focus on the retail segment, especially home loans due to relatively lower delinquencies.
Housing Finance Companies’ (HFCs) and Regional Rural Banks’ (RRBs) market share in outstanding IHLs nudged up to 18.63 per cent (from 18.47 per cent) and 1.28 per cent (1.24 per cent), respectively.
Overall, while the collective outstanding IHLs of all four primary lending institutions/PLIs (PSBs, PvBs, HFCs and Regional Rural Banks/RRBs) rose 11.76 per cent year-on-year (y-o-y), home loan disbursements inched up 0.23 per cent.
By March-end 2025, PLIs’ outstanding IHLs stood at ₹36,07,533 crore. Disbursements during FY25 were at ₹8,77,060 crore.
PSBs record highest growth
In FY25, PSBs recorded the highest y-o-y growth in outstanding IHLs and disbursements of 15.27 per cent and 12.42 per cent, respectively, among all four PLIs.
By March-end 2025, PSBs’ outstanding IHLs stood at ₹15,91,377 crore. Disbursements during FY25 were at ₹3,84,813 crore.
PvBs disbursements decline
PvBs recorded the lowest y-o-y growth in outstanding IHLs of 7.17 per cent among all four PLIs. Disbursement of these banks declined 14.71 per cent y-o-y.
By March-end 2025, PvBs outstanding IHL stood at ₹12,97,730 crore. Disbursements during FY25 were at ₹2,89,659 crore.
An expanding population of high-net-worth individuals, rising levels of disposable income, shifting buyer preferences towards larger living spaces, technologically advanced and future-proof residences served as key drivers, stimulating the housing market demand across the cities in India, according to NHB’s latest annual report.
Home loans remain the largest constituent of retail credit of Scheduled Commercial Banks with a share of 51 per cent in total retail credit as of March 2025.
HFCs reported a steady y-o-y growth in outstanding IHLs and disbursements of 12.73 per cent and 5.10 per cent, respectively.
By March-end 2025, HFCs outstanding IHLs stood at ₹6,72,170 crore. Disbursements during FY25 were at ₹1,92,586 crore.