HDFC Bank creates another crisis

The private sector bank’s no-holds-barred quest to bump up deposits (and cut back on credit) has only hurt its profitability and put off investors.

When HDFC Bank announced its January-March quarter results of the 2023-24 fiscal year, it seemed to have pulled off the unthinkable. It had managed to shave five percentage points off its dangerously high credit-to-deposit ratio, bringing it down from 110% to 105%. 

The bank had capped credit growth to a mere 1.6% on a quarter-on-quarter basis, growing deposits at a decent 7.6%. A thrust on deposit growth (along with slowing loan sanctions)  helped bring down the ratio of its total loans to deposits.

This, by any yardstick, is a job well done. Correcting the key indicator of its liquidity—and, by …


Furquan Moharkan

Furquan leads the banking coverage at The Morning Context. A business journalist with eight years of experience and a best-selling author, in his earlier stints as a reporter with the Deccan Herald and a columnist at The Banker, he wrote on banking, financial markets and regulatory affairs. He has extensively covered India's debt market crisis, banking crisis and the fall of Yes Bank.

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