Public Sector banks dominate home loan market, private banks decline: Report
Crif High Mark's report reveals a significant shift in the Indian home loan market. Public sector banks (PSBs) increased their share to 46.2, up from 37.6% year-on-year, while private sector banks' share dropped to 28.2%. Despite higher delinquencies (2.85% for PSBs vs. 1.4% for private banks), PSBs saw substantial growth. Lenders favor larger loans (over Rs 75 lakh), with a decline in loans between Rs 5 and Rs 55 lakh.
New Delhi: The share of public sector banks in the home loan market increased significantly in the April-June quarter despite witnessing a higher incidence of stress, said the credit information company Crif High Mark in its report on Tuesday, September 3.
The share of public sector banks of the overall home loan grew to 46.2 percent in June 2025, up from 37.6 percent in the year-ago period, whereas the share of private sector banks reduced to 28.2 percent, up from 35.2 percent during the corresponding period of the year-ago period.
Private sector banks vs public sector banks
The last few months have seen major private sector lenders complaining about the lack of sanity in the home loan market, calling the rate offering irrational. Home loans constitute the largest component of retail lending because of the high ticket sizes and the strong securities of homes, which make them relatively lower stressed ones.
The report further said delinquencies in public sector banks (PSBs) constitute the highest, with 2.85 percent of the outstanding amounts not paid for between 31 and 90 days. In financial parlance, the delinquency in loans means loans that were unpaid. In the public sector bank, higher delinquency was observed for the loans that were below Rs 35 lakh, said the report further.
The delinquency for the private sector lender stood at only 1.4 percent. The lower delinquency rate at private sector banks indicates robust underwriting and early risk detection, said the report.
Lenders seem to be preferring the higher-sized amount of loans as compared to the smaller ones, pointing out that 38 percent of the originations value was for loans above Rs 75 lakh as against 33.6 percent in the year-ago period. The loan segment ranging between Rs 5 and Rs 55 lakh has declined to 31.2 percent from 34.7 percent in the year-ago period.