Over the past four years, governmentowned banks have steadily accelerated market share, data published by credit bureau CRIF Highmark showed. For PSBs, the share of new home loans by value rose to 43% in FY25 from 34% in FY22. Analysts attribute the expansion in the share of business for public-sector lenders to competitive rates and government initiatives to boost home ownership.
As per the June 2025 Financial Stability Report (FSR) of the central bank, in FY25 the overall credit growth of PSU banks outpaced that of private banks after more than a decade, with home loans being among the primary growth drivers in the retail loans category. Mortgage pioneer Housing Development Finance Corp (HDFC), merged two summers ago into the bank it spawned and gave its name, had begun India’s financed home-ownership culture in the 1970s, and had a dominant share for decades in the mortgage business, where mainstream lenders were relatively late entrants.
Banks, led largely by private lenders, started pushing for home loans only in the new millennium, as services-sector pay packets surged through the first decade of liberalization and fresh housing starts in India’s big cities became a keenly tracked metric for both financiers and dependent industries, such as cement, steel, hardware and electricals.
Meanwhile, the data also showed that private banks’ share fell to 29.8% from 42.6% in the period under consideration.