Public Sector Banks Outshine Private Peers in FY25 Credit Growth
In FY25, while credit growth in Indian banks slowed, Public Sector Banks (PSBs) significantly increased their market share, outperforming Private Banks (PVBs). PSBs, leveraging stability and cautious balance sheet management, excelled in sectors like retail and industrial credit, with notable dominance in rural and semi-urban regions.
- Country:
- India
In a recent financial year, Public Sector Banks (PSBs) in India have notably increased their market presence, establishing a lead over their Private Banking (PVB) counterparts. This development, highlighted in a report by the Union Bank of India, comes amid an overall moderation in credit growth during the Financial Year 2025.
The report cites that despite the credit-deposit ratio being elevated for private banks, their incremental credit-deposit ratio saw a sharp correction, indicating a deceleration in new disbursements. In contrast, PSBs maintained stability, strategically leveraging their balance sheets to sustain growth.
Public Sector Banks have successfully capitalized on regulatory shifts affecting private banks, particularly in unsecured lending, to increase their share in the retail credit segment, especially housing loans. Furthermore, PSBs have made significant inroads in industrial credit and expanded their influence in rural and semi-urban areas, reclaiming lost grounds in urban markets.
(With inputs from agencies.)
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