HDFC Bank is aiming to reduce its credit-deposit (CD) ratio "as quickly as possible" while maintaining its commitment to profitable growth.
However, the bank has not received a directive from the Reserve Bank of India (RBI) on the timeline to cut the ratio.
"We have not received any regulatory prescription but at the same time, the thought process is that: Can we, to the best of our ability, bring it down as quickly as possible and still maintain the objective of profitable growth," said Sashidhar Jagdishan, managing director and chief executive officer, in an analyst call after the bank's first-quarter (Q1) earnings.
"We are cognizant of the risks in the system and instead of being nudged on that, we want to do it ourselves because it makes economic sense to bring it down as quickly as possible", he added.
However, Jagdishan did not specify the timeframe within which the bank would reduce its CD ratio to pre-merger levels.
"I would love to do it in one year. But it is not something that I can drop in one go. It's not practical," he said.
The ratio stood at 104 per cent in the quarter ended June 2024 (Q1FY25). The bank wants to bring it down to the pre-merger (with HDFC) level of 85 per cent.
This story is from the July 22, 2024 edition of Business Standard.
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This story is from the July 22, 2024 edition of Business Standard.
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