Core Insights - Public sector banks (PSBs) have increased their share of new home loans by value to 43% in FY25, up from 34% in FY22, while private banks' share has decreased to 29.8% from 42.6% [1][9] - The decline in private banks' market share is attributed to "irrational pricing" by competitors, leading to a slowdown in their growth [1][9] - ICICI Bank has adjusted its home loan pricing, reducing rates by over 105 basis points to 7.7%, aiming to regain market share [2][9] - HDFC Bank has also cut its home loan rate by 80 basis points to 7.9%, focusing on attracting the right customers [9] - Kotak Mahindra Bank reported strong growth in its home loan book after lowering rates by 66 basis points, although it recently raised rates by 10 basis points to 7.99% [5][9] - The Reserve Bank of India's repo rate cut by 100 basis points to 5.5% has contributed to the competitive landscape in the home loan market [5][9] - State Bank of India (SBI) has shown over 15% year-on-year growth in its mortgage book, now valued at Rs 8 lakh crore, despite raising its home loan rates [7][9] - Executives from private banks emphasize that pursuing growth at the expense of profitability is not sustainable [7][9] - Mortgage rates in major cities are currently advertised between 7.2% and 7.3%, levels not seen in recent years [8][9]
Private lenders work on winning back home loans as a growth driver
The Economic Times·2025-09-11 00:00