1 month ago
India’s largest private sector lender, HDFC Bank, is focusing on creating personalised experiences for customers to build trust and foster long-term relationships, which is expected to help the bank address the challenges it faces in deposit accretion, said Atanu Chakraborty, part-time chairman of HDFC Bank, in his address to the bank’s shareholders at its 30th annual general meeting on Friday.
“Raising the bar on customer service and improving customer journeys remains a key priority,” Chakraborty said, adding that HDFC Bank continues to work towards creating personalised experiences that build trust and long-term customer relationships. “These would help the bank to counter the challenges faced in deposit mobilisation.”
Chakraborty’s comments come as the banking system faces sluggish deposit growth amid the growing appeal of alternative investment options for household savings.
Earlier this week, Reserve Bank of India (RBI) Governor Shaktikanta Das instructed banks to offer innovative products and services and effectively use their branch networks to attract household savings as deposits. This nudge from the regulator comes amid concerns about the slow pace of deposit growth in the system, leading to a widening gap between credit and deposit growth, exacerbating concerns about banks’ liquidity management.
Meanwhile, Sashidhar Jagdishan, MD&CEO, HDFC Bank had highlighted in the bank’s annual report that the bank will grow its advances at a slower pace than its deposit, as it seeks to bring down its elevated credit- deposit ratio to pre-merger levels.
Post-merger, the credit-deposit ratio of the bank has been over 100 per cent, while it was around 87 per cent pre-merger.
In a post-earnings analyst call, the bank’s management indicated that the bank would not be involved in any competition on interest rates to attract deposits. Rather, it would rely on “engagement and service delivery” to gather deposits.
Chakraborty highlighted that the successful merger of HDFC Ltd into HDFC Bank has significantly enhanced the bank’s ability to serve its existing customers, acquire new customers, and provide all customers with a wider spectrum of financial services, which are being offered by various companies of the HDFC Bank group.
“The merger has strengthened the bank’s pathways for future growth. The bank is now a financial services conglomerate,” Chakraborty said.
The erstwhile housing finance major HDFC Ltd merged into HDFC Bank on July 1, 2023, creating a financial behemoth.
Additionally, Chakraborty said that he expects improvement in the household savings rate, which in turn would be a major driver of economic growth. “…there is a consensus that India’s best years lie ahead, and there are ample opportunities for the bank to seize,” Chakraborty said.
Chakraborty also stated in his address that a pickup in private investment, driven by increased gross capital formation in the private sector, could potentially create opportunities for credit growth.
