August 12, 2025

Mumbai: Get ready for a banking battle where India’s public sector banks are stealing the show! These banks are charging ahead with their retail loan business, far faster than private banks. What’s the secret? Lower bad loans and a strong customer base! Big names like State Bank of India (SBI), Bank of Baroda (BoB), and Punjab National Bank (PNB) are leading this growth frenzy. In the June quarter, SBI’s retail loans jumped by a solid 13% compared to last year. BoB and PNB didn’t hold back either, posting 18% and 12% growth respectively. Meanwhile, private giants like ICICI Bank, HDFC Bank, and Axis Bank managed more modest increases of 7%, 8%, and 6%. Anand Dama, head of BFSI research at Emkay Global, explained why: "Private banks have pulled back a little from retail lending because of rising delinquencies in unsecured loans like personal loans and credit cards," which form a big chunk of their lending. On the flip side, public banks focus more on safer loans like home mortgages, vehicle loans, and gold loans. Plus, these public banks started from a smaller base, so growing fast is easier. And with cheaper loans thanks to more retail deposits, they’re set to keep the pace. However, private banks still hold far bigger retail loan books. For example, Axis Bank has ₹6.22 lakh crore in retail loans, compared to ₹2.6 lakh crore for BoB or PNB. SBI is the lone public sector bank with a whopping ₹15.39 lakh crore. Nitin Aggarwal from Motilal Oswal said, "Private banks are careful even with safer home loans because they want to protect their margins." But he added that as interest rates settle, banks like HDFC will ramp up lending, aiming to grow faster than the overall market. SBI’s chairman CS Setty hinted public banks won’t back down either. He said SBI is ready to expand unsecured personal loans after watching credit profiles improve. "We were cautious earlier, but now the net monthly income to EMI ratios are looking better," he said. So, the race for retail loan growth is heating up in India’s banking world. Will private banks bounce back strong? Or will public sector banks continue their winning streak? Keep watching this thrilling showdown!

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Tags: Public sector banks, Retail loans, Sbi, Private sector banks, Loan growth, Delinquencies,