Public Sector Banks Surge in Home Loan Market Amidst Rising Stress

Public sector banks significantly increased their home loan market share in April-June 2025 despite high delinquency rates. Private banks saw reduced shares and lower delinquencies. The trend indicates public sector lenders' preference for higher-ticket loans, while private banks showcase robust underwriting. Credit card issuance declined, highlighting risk management efforts.

Public sector banks have made significant gains in the home loan market, capturing a 46.2% share by June 2025, up from 37.6% in the previous year, according to a report by Crif High Mark.

Despite the increase, these banks face high delinquency rates, with 2.85% of their loans unpaid between 31-90 days, compared to just 1.04% for private banks.

The report also noted a shift towards higher-ticket size loans, with originations for loans above Rs 75 lakh increasing to 38%. Meanwhile, new credit card issuances declined by 28%, driven by regulatory tightening and strategic risk management by lenders.