Amidst a slow overall credit offtake, home loan sector has performed well. For most banks the segment has registered a year-on-year growth of 20-25 percent.

At a time when the overall loan book of banks is growing at a dismal 9.8 percent, home loans are growing at over 20 percent.

"The total loan growth for the industry is 10% though are bank has clocked 12%," says MV Nair, CMD, Union Bank. "Of this, home loan growth is about closer to 20%."

State Bank of India saw an overall credit growth of 13.6% in November, where as home loans grew by 27.26% to Rs 14,075 crore year-on-year.

Bank of India's overall credit is growing at 15% but home loans are showing a strong 26% growth.

PNB is the only exception where the overall loan growth is greater than the home loan growth. In PNB's case the overall credit growth is 17 percent and the home loan growth is 16 percent.

Private banks are also witnessing strong growth in home loan segment. Axis bank says that its home loans have grown by 22 percent year-on-year.

"Credit growth for our bank is definitely going to be significantly slower than past, it will be in the teens," says Axis Bank CMD Shikha Sharma. "However, Axis Bank has been in the home loan market for a couple of years and has seen reasonable growth in that segment this year. Even though credit growth has been low, our home loans have been growing."

The reason behind this is policy shift on part of banks. Banks avoided unsecured loans like credit cards and personal loans during the meltdown and focused more on co-laterallised products like home loans.

Cheaper home loans combined with the increased demand for houses are also benefiting the banks.

Seeing huge potential in home loan segment, a number of banks such as State Bank of India, ICICI, Dena Bank and HDFC, the largest home loan provider, have reduced their home loan interest rates recently intensifying competition in the segment.