Mumbai: HDFC Bank MD & CEO Sashidhar Jagdishan said that Banking Scenario That had changed dramatically after the lender decided to merge parent HDFC with itself in April 2022, but the bank was not expressing regret for the decision.
He candidly admitted that things were not going as planned because of the change in policy. global economic situationJagdishan said the bank had expected a certain growth rate given the favourable environment, but the situation changed from favourable liquidity to one where liquidity became very tight. He was speaking at the bank's annual general meeting on Friday.
One month later Merger Decision in May 2022, reserve Bank of India announced a hike of 40 basis points (100 bps = 1 percentage point) in Repo Rate — This is the first in a series of hikes that have gone up to 250 bps. The rate hikes were done in response to the rise in commodity prices after the invasion of Ukraine. The RBI also drained away surplus liquidity, which increased the cost of deposits for banks and HDFC Bank was hit particularly hard as it had to raise deposits not only for incremental growth but also to cover the assets of the erstwhile HDFC. Apart from this, Jagdishan said Policy environment There was also a change in consumer preferences which were moving towards mutual funds, equities and even real estate.
He reiterated the Bank's emphasis on branch expansion and said that branch density in India is lower than developed countries and the Bank would continue to focus on opening more branches. Deposit growth Which will be much more than the deposit increase.
Jagdishan said, “It is in the economic interest of the institution to try to ensure that deposit growth is far higher than loan growth, and even if that means for some time, we have to slow down loan growth. Then we can enjoy the benefits of the upward turn of the cycle at the appropriate time.” About the bank's focus on brick and mortar outlets, Jagdishan said, “The branch is a great platform to connect with customers. You will still see the bank's branches in New York and London.”
He candidly admitted that things were not going as planned because of the change in policy. global economic situationJagdishan said the bank had expected a certain growth rate given the favourable environment, but the situation changed from favourable liquidity to one where liquidity became very tight. He was speaking at the bank's annual general meeting on Friday.
One month later Merger Decision in May 2022, reserve Bank of India announced a hike of 40 basis points (100 bps = 1 percentage point) in Repo Rate — This is the first in a series of hikes that have gone up to 250 bps. The rate hikes were done in response to the rise in commodity prices after the invasion of Ukraine. The RBI also drained away surplus liquidity, which increased the cost of deposits for banks and HDFC Bank was hit particularly hard as it had to raise deposits not only for incremental growth but also to cover the assets of the erstwhile HDFC. Apart from this, Jagdishan said Policy environment There was also a change in consumer preferences which were moving towards mutual funds, equities and even real estate.
He reiterated the Bank's emphasis on branch expansion and said that branch density in India is lower than developed countries and the Bank would continue to focus on opening more branches. Deposit growth Which will be much more than the deposit increase.
Jagdishan said, “It is in the economic interest of the institution to try to ensure that deposit growth is far higher than loan growth, and even if that means for some time, we have to slow down loan growth. Then we can enjoy the benefits of the upward turn of the cycle at the appropriate time.” About the bank's focus on brick and mortar outlets, Jagdishan said, “The branch is a great platform to connect with customers. You will still see the bank's branches in New York and London.”