PSBs increase market share in secured lending segments

MUMBAI: Public sector banks (PSBs) have regained market share in key secured lending segments over the past year, even as private banks and non-banking finance companies (NBFCs) continue to dominate unsecured consumer credit, according to the Feb 2026 Experian Industry Insights report on lending trends.

The most visible trend in the current credit cycle is the expansion of PSBs into segments that were earlier dominated by private lenders and NBFCs. PSBs increased their share in auto loans to 36% in Q3 FY26 from 32% a year earlier, a gain of four percentage points. Their share in home loans also rose to 35% from 33% over the same period.

Private banks saw a marginal decline in auto loans, where their share slipped to 34% in Q3 FY26 from 35% a year earlier. In home loans, private banks retained the largest share at 42%, which remained unchanged from the previous year.

In unsecured lending, private banks continue to dominate credit cards with a 72% share. However, they are facing rising competition from NBFCs in personal loans. Private banks accounted for 46% of the personal loan market in Q3 FY26, down from 48% a year earlier. NBFCs increased their share in personal loans to 36% from 33%.

NBFCs remain the dominant players in consumer credit segments.

Total loan sourcing reached around Rs 20,00,000 crore in the latest quarter, a 36% increase from a year earlier, creating room for PSBs to expand their balance sheets without necessarily reducing the absolute volumes of competing lenders.

The move by public sector banks toward secured lending is also supported by improving asset quality across the industry.