PSU banks up the ante in retail lending, challenge private sector bank's forte

New Delhi: When SBI chairman Om Prakash Bhatt launched the teaser home loans in 2010, not many realised what it meant for competition in a segment which the private sector lenders dominated.

Now, State Bank is the biggest mortgage lender and almost every state-run lender is pushing aggressively in to the retail market and that could cause headache to private rivals as the future growth pie lies in the semi urban areas and villages.

State-run banks, which have historically been wholesale lenders, started taking retail lending more seriously at the beginning of this decade not because they loved individual borrowers, but because of a drying up of opportunities in their traditional constituency - corporate lending.