Private banks in India have steadily increased their share of total bank deposits over the past five years, while public sector banks (PSBs) have seen a consistent decline, according to data shared by Union Bank of India.
PSBs Lose Ground in Deposit Market Share
In March 2019, PSBs held 63.2% of total deposits in the country. However, by March 2025, their share dropped to 56.3%, marking a fall of nearly 600 basis points. The report said, “PVBs continue to increase market share in total deposits while PSBs lost approximately 600 bps in share during the last 5 years.”
Private Banks Gain Across Regions
Meanwhile, private sector banks (PVBs) increased their deposit share from 28.6% to 34.8% in the same period. Other banks kept a stable share, hovering between 8.1% and 8.8%.
Interestingly, private banks have grown faster even in semi-urban and rural regions—areas that were once strongholds of PSBs. This shift indicates a broader acceptance of private banks across all regions.
Regional Differences in Banking Trends
In metro cities, private banks have almost matched PSBs in terms of deposit share. Though PSBs still lead in Current Account Savings Account (CASA) deposits in rural and semi-urban regions, private banks are closing the gap.
Moreover, private banks dominate CASA deposits in metros and are gaining ground in urban centres. The report highlighted that private banks are expanding faster in urban areas than their public sector counterparts.
Deposit Growth Patterns and CASA Ratio
Even though PSBs saw better growth in current accounts in metro areas, private banks posted higher overall deposit growth—mainly driven by term deposits.
However, the CASA ratio (the proportion of deposits in current and savings accounts to total deposits) of private banks is falling faster than that of PSBs in every region.
Year-on-Year Growth: Private Banks Lead
Private banks continue to outperform in yearly deposit growth. In March 2024, they posted the highest growth at 20.1%, whereas PSBs grew at 9.4%. This trend remained in March 2025 as well—private banks grew 12%, compared to 9.3% for PSBs and 10.3% for scheduled commercial banks (SCBs).
PSBs Lose Dominance as Private Banks Expand
Overall, the data confirms that private banks are consistently attracting more deposits and expanding their market presence. In contrast, PSBs are steadily losing their traditional dominance in the Indian banking sector.
