Look to resolve issues with deposit growth: HDFC Bank's Atanu Chakraborty

Says focused on creating personalised experience for customers

India’s largest private sector lender HDFC Bank is focusing on creating personalized experiences for customers to build trust and foster long-term customer relationships, which is expected to help the bank address the challenges it faces in deposit accretion, Atanu Chakraborty, part-time chairman of the bank, said on Friday. He was addressing the bank’s shareholders at its 30th annual general meeting (AGM).

“Raising the bar on customer service and improving customer journeys remain 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 mobilization,” he said.

Chakraborty’s comments come as the banking system faces sluggish deposit growth amid 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 came amid concerns of slow pace of deposit growth in the system, leading to a widening gap between credit and deposit growth, exacerbating concerns about banks’ liquidity management.

Sashidhar Jagadishan, MD & CEO of HDFC Bank, had highlighted in the bank’s annual report that the lender will grow its advances at a slower pace than its deposit, as it seeks to bring down its elevated credit-deposit (CD) ratio to pre-merger levels.

Post-merger, the CD 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 had indicated that the lender would not be involved in any competition on interest rates to attract deposits. Rather, it would rely on “engagement and service delivery” to get deposits.

Chakraborty highlighted that the successful merger of erstwhile housing finance major HDFC Ltd into HDFC Bank on July 1, 2023 has significantly enhanced the lender’s ability to serve its existing customers, acquire new customers and provide all customers 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.

Additionally, Chakraborty said he expects improvement in 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.

He 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.