"There has been a slight pick-up (in deposit growth) and more importantly deposit growth is outpacing loan growth," HDFC Bank Deputy Managing Director Paresh Sukthankar told reporters here.
He added that this will result in a cut in deposit rates, which are generally a pre-cursor for lending rate cuts.
"It's only when the banks reduce their deposit rates that they can re-calibrate their base rate ... Meaningful movements in base rates would have to follow changes in deposit rates," he said, adding that the general direction of the rates is downward.
HDFC Bank has cut its minimum lending rate twice this fiscal by a cumulative 0.35 per cent to 9.70 per cent, which is one of the most competitive rates among domestic lenders.
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On the jump in its provisioning over the last two quarters, Sukthankar said HDFC Bank's asset quality is stable and pointed out that some of it is due to a hike in floating provisions, which can be utilised in the future.
The bank today launched a mobile van project called 'Dhanchayat', which is aimed at deepening financial literacy in the rural areas. It will specifically work to impress the people to be a part of the formal financial system and drive them away from the clutches of the unorganised money lenders.
Sukthankar said in the first phase of the project, it is targeting to reach out to 5,000 villages across the country with the vans, which will be showing a specially made 9-minute film to the villagers.