Public sector banks (PSBs) have significantly improved their position in the individual housing loan (IHL) market, increasing their share to 44.11% of total outstanding IHLs as of March 2025, up from 42.77% in March 2024. This shift has occurred even as private sector banks (PvBs) experienced a decline in market share.
According to the latest data from the National Housing Bank (NHB), the market share of private sector banks in outstanding IHLs fell to 35.97%, down from 37.51%. Experts attribute the increase in PSBs’ market share to their ability to provide loans at lower rates, aided by access to relatively cheaper deposits. Additionally, their focus on the retail segment, particularly home loans with lower delinquencies, has contributed to this success.
Additionally, Housing Finance Companies (HFCs) and Regional Rural Banks (RRBs) saw slight increases in their market shares for outstanding IHLs, rising to 18.63% (up from 18.47%) and 1.28% (up from 1.24%), respectively. Overall, the total outstanding IHLs from PSBs, PvBs, HFCs, and RRBs rose by 11.76% year-on-year, while home loan disbursements saw a modest increase of 0.23%.
As of March 2025, the total outstanding IHLs for primary lending institutions (PLIs) reached ₹36,07,533 crore, with disbursements totaling ₹8,77,060 crore for the fiscal year.
In FY25, PSBs recorded the highest year-on-year growth in outstanding IHLs and disbursements, with increases of 15.27% and 12.42%, respectively. By the end of March 2025, PSBs reported outstanding IHLs of ₹15,91,377 crore, with disbursements amounting to ₹3,84,813 crore.
Conversely, private sector banks experienced the lowest year-on-year growth in outstanding IHLs at 7.17%, and their disbursements fell by 14.71%. At the close of March 2025, outstanding IHLs for PvBs stood at ₹12,97,730 crore, with disbursements reaching ₹2,89,659 crore.
The NHB’s latest annual report highlights factors such as an expanding population of high-net-worth individuals, increasing disposable income, and changing buyer preferences towards larger living spaces and technologically advanced residences as critical drivers of housing market demand across Indian cities.
Home loans continue to dominate the retail credit segment of Scheduled Commercial Banks, accounting for 51% of total retail credit as of March 2025. HFCs also reported robust growth in outstanding IHLs and disbursements, with increases of 12.73% and 5.10%, respectively. By March 2025, outstanding IHLs for HFCs totaled ₹6,72,170 crore, with disbursements of ₹1,92,586 crore.
Published on November 11, 2025.
