Growth in the home loan market has picked up pace in the first quarter with leading players such as State Bank of India, HDFC and LIC Housing Finance aggressively growing their books through special home loan products.

Some banks such as SBI are growing at the expense of others, with customers shifting loan accounts into the special loan segment of SBI, which has the lowest first year fixed rate at 8 per cent.

All three institutions — SBI, HDFC and LIC Housing Finance — have innovative special home loan schemes, which have shown robust growth in the first quarter.

SBI continues to be the largest home loan provider with a total home loan book of Rs 74,469 crore and a market share of close to 24.46 per cent, followed by HDFC at Rs 65,823.73 crore, ICICI Bank at Rs 47,306 crore and LIC Housing Finance at Rs 38,000 crore.

Car loans and personal loans too have grown, but at a much slower pace, with HDFC Bank and SBI cornering the major shares.

RR Nair, managing director and chief executive officer of LIC Housing Finance, said about 30 per cent of its home loan book was refinanced during the last financial year. “But that number is coming down as banks have dropped special offers. The home loan market has started expanding on fresh home loan demand.”

Another public sector bank, Punjab National Bank, is also trying to grow its home loan book from the present Rs 10,000 crore through reduced rate of interest.

Keki Mistry, managing director and vice-chairman of HDFC, said the home loan market is expanding on fresh loan accruals. “We saw healthy growth in the first quarter and see the demand strong enough to sustain the growth through the year,” he said.

ICICI Bank’s home loan book showed lower growth due to repayment, according to a senior official.

The bank, which floated a special home loan scheme, reported 7 per cent growth in home loans in the first quarter. The bank has reverted to a phase of growth in advances — both in corporate and retail loans — after slowing down for a while to clean up the pile of bad loans.

According to latest figures from the Reserve Bank of India (RBI), home loan outstanding of banks has been expanding at 9.6 per cent with total loans for the system growing by Rs 26,870 crore year on year until May 21. This is higher than the growth posted in the year-ago period when the outstanding expanded 5.7 per cent, growing by Rs 15,095 crore.

The asset quality is the strongest for HDFC with its gross non-performing loans pegged at Rs 905.03 crore at the end of the first quarter. For SBI, it is close to Rs 4,500 crore of its retail NPAs. For HDFC, this is equivalent to 0.89 per cent of the loan portfolio, marginally down from last year.