Pvt banks may lose ground again in FY26 as credit growth lags

India’s private-sector banks are likely to lose market share for a second consecutive year in 2025-26, as their loan books continue to expand much slower than overall bank credit.

- KRISHNA KANT

The combined loan book, or advances, of listed private-sector lenders such as HDFC Bank, ICICI Bank and Axis Bank grew 8.9 percent year-on-year in FY25 and 9.9 per cent year-on-year in the first half of FY26. This lags behind the 11.4 per cent and 11.7 per cent year-on-year expansion in the combined loan book of all listed banks over the same periods. It could be the first time in more than 15 years that private-sector banks would trail overall bank credit growth for two consecutive years.

Private-sector banks’ combined advances rose to₹77.14 trillion at the end of September 2025, up from ₹73.56 trillion at the close of FY25 and ₹67.53 trillion at FY24-end. By contrast, listed banks’ combined advances rose to ₹193.6 trillion at end-September this year from ₹184.66 trillion at end-March and ₹165.56 trillion at the end of FY24.

The analysis is based on the reported annual results and H1FY26 financials of 42 listed banks including privatesector banks, public-sector banks and small finance banks which together reported advances of 193.6 trillion at the end of September. For comparison, overall bank credit reached ₹192.7 trillion as of October 3, 2025.