State Bank of India (SBI), the country's largest lender, is seriously considering monetizing its retail home loan pools to enhance credit growth amid sluggish deposit inflows, SBI Chairman CS Setty said in an interview this week, according to livemint.com. This move aims to tap into the relatively small Indian securitization market, where retail home loans currently represent a minor segment.
SBI's approach involves packaging home loan assets into securities that can be sold to investors, thereby freeing up capital to extend more credit. Chairman Setty acknowledged that while the securitization market in India is underdeveloped and retail home loan securitization is even less common, SBI's initiative could provide a significant boost to market sentiment. The bank is exploring this strategy as a response to the challenge of deposit growth lagging behind credit demand.
The Indian securitization market remains nascent compared to global peers, with retail home loans accounting for a small share. SBI's potential entry into this space could encourage other banks to follow suit, potentially expanding the market and improving liquidity. This development comes at a time when credit growth is crucial for economic activity, and banks are seeking alternative funding avenues beyond traditional deposits.
SBI's consideration of home loan securitization was publicly confirmed by Chairman CS Setty in an interview published on June 22, 2026, by livemint.com, marking a notable step toward diversifying credit funding sources in India.