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Key Points

Private banks are steadily eating into PSBs' deposit market share, gaining 600 basis points over five years according to UBI data. Metro areas now show near-parity between private and public banks, signaling a sectoral shift. While PSBs maintain rural CASA leadership, private lenders are making inroads even in traditional PSB strongholds. The report highlights faster deposit growth for private banks across all regions, with 12% YoY growth versus PSBs' 9.3% in 2025.

Key Points: Private Banks Gain 600 BPS Deposit Share as PSBs Decline Says UBI

  • Private banks grew deposits from 28.6% to 34.8% since 2019
  • PSBs lost 600 bps share now holding 56.3% deposits
  • Metro areas show equal private-PSB deposit market share
  • Rural CASA dominance of PSBs eroding as private banks expand
2 min read

Private banks increased market share in total deposits while PSBs loses 600 bps over 5 years: UBI Report

UBI report reveals private banks captured 34.8% deposits while PSBs lost 600 bps in 5 years, with metros now evenly split between both segments.

"PVBs continue to increase market share in total deposits while PSBs lost approximately 600 bps in share during the last 5 years - Union Bank of India Report"

New Delhi, June 23

Private banks in India have been steadily increasing their share in total bank deposits over the last five years, while public sector banks (PSBs) have witnessed a decline, according to data shared by Union Bank of India.

The report highlighted that in March 2019, public sector banks held 63.2 per cent of the total bank deposits. However, by March 2025, their share fell to 56.3 per cent, a decline of around 600 basis points.

It stated "PVBs continue to increase market share in total deposits while PSBs lost approximately. 600 bps in share during the last 5 years"

During the same period, private banks (PVBs) increased their share from 28.6 per cent to 34.8 per cent. The share of other banks remained almost stable, ranging between 8.1 per cent and 8.8 per cent.

Private banks have seen higher growth in deposits than PSBs, even in rural and semi-urban areas, which were earlier considered strongholds of public sector banks.

The report also said that absolute deposit accretion slowed in FY25, but PSBs managed to capture a higher share of the incremental market.

There are clear regional differences in deposit patterns. In metro areas, the market share of private banks in total deposits is now nearly equal to that of PSBs.

While PSBs still lead in CASA (Current Account Savings Account) deposits in rural and semi-urban regions, private banks are gradually increasing their share in these areas.

Private banks have already captured a major share of CASA deposits in metro regions and are also gaining ground in urban centres. Private banks are growing faster in urban areas compared to PSBs.

Although PSBs recorded higher growth in current accounts in metro regions, private banks had better overall deposit growth, mainly driven by term deposits.

The report also pointed out that the CASA ratio of private banks is falling at a faster pace than that of PSBs across all regions.

When it comes to year-on-year deposit growth, private banks continue to perform better. In March 2024, private banks saw the highest growth at 20.1 per cent, while PSBs posted a lower growth of 9.4 per cent.

This trend continued in March 2025, with private banks recording 12 per cent growth, compared to 9.3 per cent for PSBs and 10.3 per cent for scheduled commercial banks (SCBs).

This data indicated that private banks are attracting more deposits and steadily expanding their presence, while public sector banks are losing their earlier dominance in the Indian banking sector.

- ANI

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Reader Comments

Here are 6 diverse Indian perspective comments for the banking article:
R
Rajesh K.
Not surprising at all! Private banks offer better digital services and customer experience. Last time I visited a PSB branch, I wasted 2 hours just to update my passbook. Private banks have understood what modern customers want. 👍
P
Priya M.
This trend worries me. What about financial inclusion in rural areas? PSBs have been the backbone of our banking system for decades. If they keep losing share, will private banks serve farmers and small towns with same commitment?
A
Amit S.
I shifted to private bank 3 years back and never looked back. Their apps work 24x7, customer care responds quickly, and I get better interest rates on FDs. PSBs need to wake up and modernize fast!
S
Sunita R.
As a senior citizen, I still prefer PSBs. They may be slower but feel more trustworthy. Private banks keep pushing unnecessary insurance products and credit cards. PSBs have stood the test of time.
V
Vikram J.
Interesting data! Shows how banking habits are changing in India. Private banks are winning in metros but PSBs still strong in rural areas. Maybe a hybrid model would work best - private efficiency with PSB's reach.
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Neha P.
The government should seriously reform PSBs. So much taxpayer money goes into them but they can't compete with private players. Either improve or privatize them completely. We can't keep funding inefficiency forever.

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