Public and NBFCs Surge as Private Banks Slip in Market Share
JM Financial reports a shift in financial landscape as public sector banks and non-banking financial companies gain market share while private banks face a decline. Significant gains are noted among PSBs in secured loans, whereas NBFCs thrive in smaller ticket loans. Concerns arise over loan quality deterioration in unsecured segments.
- Country:
- India
A recent report by JM Financial highlights a seismic shift in the financial sector, with public sector banks (PSBs) and non-banking finance companies (NBFCs) expanding their foothold at the expense of private banks. The report underscores that in FY25, PSBs gained 170 basis points in market share for disbursement value, as private banks witnessed a 140 basis point drop year-on-year.
The competitive landscape is evolving, favoring PSBs, whose origination value share increased from 37% in FY24 to 43% in FY25. Conversely, private banks saw their share dip from 37% in FY24 to 30% in FY25, signaling a larger role for PSBs in loan origination.
While private banks continue to dominate the credit card segment with a 70% issuance share in FY25, they have cut back on small-ticket personal loans, pushing up their average ticket size by 30% year-on-year. NBFCs, on the other hand, have gained ground in personal loans by offering smaller ticket options despite growing quality concerns in unsecured loans.
(With inputs from agencies.)
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