 "CS Setty, Chairman, SBI")
Having touched a housing loan book of Rs 8 trillion, State Bank of India (SBI) — the country’s largest lender — now expects to grow its mortgage book to Rs 10 trillion by March 2027. The lender will also increasingly leverage its home loan relationships to offer more financial products, including credit and liabilities, to borrowers.
C S Setty, chairman, SBI, told Business Standard that the housing credit portfolio has been growing by 12-14 per cent, and at this pace, the loan book is expected to reach Rs 10 trillion by 2027. “The bank has the potential to grow more,” he said.
The lender touched the Rs 8 trillion mark in February 2025.
SBI’s home loan portfolio grew by 14.26 per cent year-on-year (Y-o-Y) to Rs 7.92 trillion as of December 2024. Home loans accounted for 22.94 per cent of the total domestic loan portfolio. The home loan market share of SBI at the industry level was 20.48 per cent as of December 2023.
HDFC Bank — the second-largest lender in the country and the largest private sector bank — saw its retail mortgage loans cross the Rs 8 trillion mark by the end of September 2024. By the end of December, the portfolio had grown to Rs 8.17 trillion, representing a 9.7 per cent Y-o-Y growth.
The government’s thrust on affordable housing, tie-ups with a large number of builders, and leveraging branch and central processing units have helped, and will continue to help, expand the home loan pool. The bank has a sizeable presence across metro, urban, semi-urban, and rural areas for lending, Setty said.
According to Crisil Market Intelligence & Analytics, the overall housing segment is expected to grow at a compound annual growth rate of 13-15 per cent from 2022-23 through 2026-27 (FY27). The size of the segment is likely to reach Rs 48.5 trillion in FY27. It grew by 12.6 per cent during 2018-19 through 2022-23. The Government of India has been pursuing various social welfare schemes and initiatives to enhance the flow of credit to the housing sector and increase home ownership in India.
According to SBI’s annual report for 2023-24 (FY24), the bank has been onboarding the maximum number of projects under the builder tie-up scheme, providing a much-needed boost to its home loan portfolio while improving sourcing quality and turnaround time. So far, the bank has approved 10,096 residential projects (Real Estate (Regulation and Development) Act-approved) as tie-up projects.
Earlier this month, the lender cut its home loan lending rate by 25 basis points (bps) to 8.25 per cent. The rate revision by the public sector lender followed the Reserve Bank of India’s reduction in the policy repo rate by 25 bps to 6.25 per cent on February 7, 2025, signalling an easing of rates in the system.
A senior SBI executive said delinquency in this portfolio is low. Since home loans represent a major capital expenditure for families, timely repayment is a priority for borrowers. Constant proactive monitoring, follow-ups, and soft outreach calls to customers have helped restrict net non-performing assets in home loans to 0.76 per cent as of March 2024, according to the FY24 annual report.
While the tenure of loans at SBI could be 20-25 years, the average life of a home loan is about 15 years due to prepayments. “Since a home loan is a family-oriented decision, there is good traction for engaging with customers for other financial products like car loans. Many times, a house is also kept as collateral for an education loan,” Setty added.
