PSB increases market share in outstanding individual home loans

Private sector banks’ market share in outstanding IHLs fell from 37.51 percent to 35.97 percent, according to the latest NHB data

During the same period, the market share of private sector banks (PvBs) in outstanding IHLs fell from 37.51 percent to 35.97 percent, according to the latest NHB (National Housing Bank) data.

Market experts attribute the increased market share of PSBs to their ability to offer loans at a cheaper price due to access to relatively cheaper deposits and their focus on the retail segment, especially home loans due to relatively lower delinquencies.

The market share of Housing Finance Companies (HFCs) and Regional Rural Banks (RRBs) in the outstanding IHLs increased to 18.63 percent (from 18.47 percent) and 1.28 percent (1.24 percent), respectively.

While collective outstanding IHLs of all four primary lending institutions/PLIs (PSBs, PvBs, HFCs and Regional Rural Banks/RRBs) rose 11.76 percent year-on-year (yoy), home loan disbursements rose 0.23 percent.

At the end of March 2025, PLIs’ outstanding IHLs stood at ₹36,07,533 crore. Disbursements during FY25 stood at ₹8,77,060 crore.

PSBs are showing the highest growth

In FY25, PSBs recorded the highest year-on-year growth in outstanding IHLs and disbursements at 15.27 percent and 12.42 percent respectively among all four PLIs.

At the end of March 2025, PSBs’ outstanding IHLs stood at ₹15,91,377 crore. Disbursements during FY25 stood at ₹3,84,813 crore.

PvB benefits are decreasing

PvBs recorded the lowest year-on-year growth in outstanding IHLs at 7.17 percent among all four PLIs. These banks’ payouts fell by 14.71 percent year-on-year.

At the end of March 2025, PvB’s outstanding IHL stood at ₹12,97,730 crore. Disbursements during FY25 stood at ₹2,89,659 crore.

A growing population of high net worth individuals, rising levels of disposable income, shifting buyer preferences towards larger living spaces, technologically advanced and future-proof homes served as key drivers and boosted demand in the urban housing market in India, said NHB’s latest annual report.

Home loans remain the largest component of Scheduled Commercial Banks’ retail credit, with a 51 percent share of total retail credit as of March 2025.

HFCs reported steady year-on-year growth in outstanding IHLs and payouts of 12.73 percent and 5.10 percent, respectively.

At the end of March 2025, HFC’s outstanding IHLs stood at ₹6,72,170 crore. Disbursements during FY25 stood at ₹1,92,586 crore.

Published on November 11, 2025