HDFC Bank's New Strategies Amid Shifting Investment Trends
HDFC Bank is adjusting its strategies as people increasingly prefer mutual funds over traditional bank deposits. This shift is impacting the bank's low-cost deposit acquisition, credit deposit ratio, and net interest margin trajectory. The bank plans technological advancements to mitigate these impacts while ensuring workforce stability.
- Country:
- India
HDFC Bank is facing challenges due to a shift in investment preferences as more people are opting for mutual funds over traditional bank deposits. This change could affect the bank's ability to attract low-cost deposits, according to CEO Sashidhar Jagdishan.
During the bank's annual general meeting, Jagdishan noted that the bank had to increase term deposits recently to manage its credit-deposit (CD) ratio after its merger with HDFC. Despite the impact on net interest margins, the bank expects faster deposit growth outpacing the banking system long-term.
In response to the changing economic environment, the bank is focusing on technological improvements and new product innovations. Chairman Atanu Chakraborty emphasized the need for the private sector to innovate and adapt rather than wait for demand recovery. The bank's workforce stability remains a priority amid these changes.
(With inputs from agencies.)
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