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HDFC Bank Q1FY27 Below Estimate, Net Interest Margin At Record Low — Transcript

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0:06Well, let's cut straight away to the
0:08HDFC bank management, their CFO
0:10Shinavasan Vedinadan addressing the
0:12media on their performance.
0:13>> After the opening remarks, we'll
0:15straight go to question and answer
0:16session. Uh with that, Sash over to you
0:18please.
0:19>> Thank you Shini and thank you all for
0:22joining on the Saturday for the Q1
0:24results.
0:26I would like to first thank the people,
0:28our people and our stakeholders as we
0:31navigated over the f last few quarters.
0:34Our people have kept steadfast focus and
0:38on customer needs and further build the
0:40franchise. I'm proud of them. A sincere
0:43gratitude to the board for their
0:45guidance through these um quarters and
0:49also to Kiki Mistri for standing in as
0:52the interim chairman of uh the board
0:55until now. A hearty welcome to our new
0:58chairman Mr. Rajiv Kumar. Looking
1:01forward to taking the franchise to the
1:03next growth stage. With appointment of
1:05Mr. Raji Kumar there is a sense of
1:07stability and clear signal to minimize
1:10uncertainties in a very short time
1:12period.
1:14Uh coming back to some of the
1:16accomplishments our deposit growth has
1:19been reasonably relative or relatively
1:21higher to historical quarter one trends.
1:25Uh we continue to gain market share both
1:28on a stock basis and also from a
1:30incremental deposit market share basis
1:32as well. Our branch productivity
1:35continues to be extremely is continues
1:38to be best-in-class and over the next
1:41two three years we should sort of
1:43realize the benefits of all the
1:44investments and distribution we have
1:46done over the last five six years
1:49advances as we had envision envisioned I
1:53think we are on the cusp of pressing the
1:55pedal um opportunities do exist and
1:59there is a fair amount of u um buoyancy
2:03in what we are doing at this stage.
2:06Um
2:08the environment continues to be very
2:11healthy. Liquidity
2:14uh augmentation through FCNR and swap
2:16window is an opportunity that we are
2:18focusing on. We were uh in the first
2:22month of June um and and this part of
2:25July. I think a large part of our work
2:27was was uh towards um building necessary
2:32product approvals and uh documentation
2:36both internally and with counterparties
2:38as well. I think over the next couple of
2:40months I think we should see the
2:42momentum picking up.
2:45As you know the government had flagged
2:47off the ECLGs scheme 5.0 zero um and I
2:51think that's a great booster for us and
2:53we will be a significant player in the
2:56mid midsight midm market as well
2:59competition continues to be very intense
3:01both on the asset and liability side but
3:03we are going to be here as we believe
3:07that uh we are at the cusp of offsetting
3:10some of these intense uh spreads um uh
3:15by off through efficiencies that we will
3:18gain through better uh service
3:20turnaround time and also leveraging on
3:23technologies. Coming to the
3:26efficiencies, I think that is the most
3:28exciting part of what we are all
3:30endeavoring in terms of driving a
3:33certain um sense of energy in the
3:36organization across length and breadth.
3:38Uh customer service continues to be top
3:41focus. It was always there but now it is
3:43on a very heightened basis. Our first
3:46focus is to see how we can cut down and
3:49and and reduce turn times on product and
3:52service deliveries. We are trying to
3:54resequence our technologies to have
3:57better adoption of digital journeys. We
4:00are embedding AI in our digital journeys
4:04to be able to fasttrack some of these
4:07into a virtually frictionless backend uh
4:11uh uh touch.
4:14I this is going to provide not only a
4:16great customer experience but also sort
4:19of translate into efficiencies which we
4:22will we'll start to see acrewing over
4:24the next two to three years. uh
4:27obviously security is also one of the
4:30top of the charts in terms of focus not
4:32just for us but I'm sure at the country
4:34level and also globally uh considering
4:37that we have seen a new set of uh AI
4:41attacks or potential attacks that may
4:44arise. I think we're also bolstering our
4:47security systems to be able to defend
4:49such uh AI attacks as well. uh whilst
4:54the the environment seems to be
4:57reasonably sanguin, we have seen a lot
4:59of u macro challenges in the recent past
5:03but I think economy has been rather
5:05resilient to be able to withstand those
5:07kind of ups and downs in terms of
5:10liquidity in terms of the West Asia
5:12conflict in terms of the currency
5:15movements in terms of the fuel movements
5:17but I think uh I think the country has
5:21demonstrated or macro fundamentals has
5:23demonstrated the resilience that is that
5:25we are very proud of and so is the in
5:29terms of the portfolio quality not just
5:31for us but also at a banking system
5:33level as well. So things remain
5:36reasonably healthy at a macro level and
5:38at the institution level and we are at
5:41the cusp of you know having a different
5:44kind of uh energy over the next couple
5:47of years and that's what we are all
5:49focusing to the medium and long term
5:51short-term uh
5:54girrations will be there. It is not
5:56something that is our focus area. it's
5:59the medium to long term in providing or
6:01getting um the efficiencies and driving
6:04stakeholder um returns is what we are
6:08all looking forward to and let me pause
6:11out here and we take on any questions um
6:14uh from all of you. Thank you.
6:16>> Uh thank you Si NRA. We can open it up
6:18and build a queue for Q&A. Thank you.
6:22>> Thank you very much. We'll now begin the
6:25question and answer session. Anyone who
6:27wishes to ask a question may press RN1
6:30on the touchstone telephone. If you wish
6:32to remove yourself from the question
6:34queue, you may press RN2.
6:36Participants are requested to use
6:38handsets while asking a question. Ladies
6:41and gentlemen, we will wait for a moment
6:43while the question Q assembles. A
6:46request to all the participants kindly
6:47limit yourself to two questions per
6:49participant and rejoin the queue for a
6:51follow-up question.
6:55First question is from line of Ritu
6:56Singh from CNBC. Please go ahead.
7:00>> Thank you very much uh for the
7:02opportunity. Uh uh Mr. Jagadish if to
7:05you know I could start with your
7:06comment. You're saying you're on the
7:07cusp of having a different kind of
7:09energy over the next few years. Of
7:11course there may be some blips along the
7:13way but you know two of these concerns
7:15that have remained with investors since
7:17the merger uh you know in terms of
7:18synergy play out. One, margins have not
7:21come back to the kind of levels we saw
7:23pre merger. And two, uh the loan deposit
7:26ratio continues to be very high. Even in
7:28this quarter, your margins, if I'm not
7:30wrong, are are the lowest that the bank
7:32has ever reported at 3.26% and the CD
7:35ratio, uh, you know, at as much as 96%.
7:39On both of those fronts, I mean, when do
7:41you see a turnaround? What's really, you
7:43know, continuing to pay in the bank? and
7:45uh FCNRB there as well you know since
7:48you have this large presence overseas uh
7:51what kind of target have you set
7:52internally for the bank uh to raise in
7:55terms of FCNRB what kind of leverage are
7:57you offering what kind of uh you know
7:59impact could that have on the margins as
8:00well as you go ahead and raise these and
8:03uh finally Mr. Jagishan before you know
8:05I get back uh on the CEO reappointment
8:08uh we believe the bank was waiting for
8:10the new chairman to take over which has
8:12happened uh you know what seems to be
8:14causing a delay and when is this
8:16expected to be cleared by the board
8:19>> so let me take on the CD ratio
8:23number one is um I think not just um you
8:27may have seen the monetary policy in the
8:29past it's very amply clear the CD ratio
8:33is not a indicator that is going to be
8:36focused on at least in the near future.
8:39It's going to be the liquidity coverage
8:40ratio.
8:42So that is exactly what we are also
8:45focusing. Um the we are reasonably
8:48comfortable from a liquidity coverage
8:50ratio and um that's a metric. So CD
8:55ratio is not something that we will be
8:58focusing for some time and that's number
9:00one. In terms of the margins, do you
9:04want to
9:04>> Yeah, let me let me take the margin. Um
9:07>> yeah,
9:08>> the margin there are two aspects of
9:10margin. Uh one um the current margin
9:14that you're talking about. Uh we we will
9:17urge you not to look at quarterly. We
9:19have mentioned that in the past. Uh at
9:21the minimum you should look at annually
9:23in terms of margin because uh quarter to
9:25quarter there are several customer needs
9:28that we will meet. If we start to focus
9:30on short term uh we will not be able to
9:33meet the customer needs and appropriate
9:35franchise growth uh for the medium to
9:37long term. So we would not uh uh urge we
9:40urge you not to bother with anything to
9:42do with quarter. That's one. Second uh
9:44you touched upon in terms of longer term
9:47right uh whether the margin post merger
9:50and from then when we get to pre merger
9:52and so on. So that aspect of it
9:54continues to remain an opportunity space
9:56that we pursue uh both uh uh from a cost
10:00of funds as well as yield. Uh cost of
10:02funds is the mix of the borrowings and
10:04and deposits as well as the kasa uh
10:07depending on how the household savings
10:10move irrespective of what goes on in
10:12household savings. That is the kind of
10:13investment uh we saw through a few years
10:16ago and started to expand the
10:17distribution. uh we are in 4,100 towns
10:20and cities uh for a reason that we want
10:23to make the unit economics work because
10:25you and I will maintain uh savings
10:27account balances only to certain level.
10:30We are not going to have
10:31disproportionate level of savings
10:33account balances. If we have we will go
10:35and make other investments and so the
10:37way to operate which we have invested
10:39and we are executing to is the unit
10:41economics which means we need more kind
10:44of a base. We are little more than 100
10:46million 102 million customers and uh per
10:49per branch we keep adding almost uh last
10:52quarter was 1.2 1.3 million uh liability
10:54relationships. We keep plowing this to
10:57get that unit economics work and when we
10:59do this we we cognizant of the cost
11:01because you know that once you play the
11:03unit economics it could result in
11:05disproportionate cost increase which is
11:07where we try to keep that lid for
11:09efficiency both branch productivity and
11:11people productivity uh in our site to
11:13drive that. So that's from a from a
11:16liability side from a mix of products.
11:18On the liability side on the asset side
11:21the margin lift the margin opportunity
11:24remains to be in the mix of products.
11:25Today we are 52% of our book is retail
11:29or long-term we have been at a 60% our
11:32we envisage to get there because India's
11:34GDP composition has got 60% of
11:37consumption spending uh in order to be
11:40uh moving in tandem with how the economy
11:43is moving uh we need to be 60% and
11:46that's part of the journey and and it is
11:48not something that goes in a hurry uh
11:50but that's part of our uh annual plan
11:52and the strategic plan is to get that
11:54mix up over time. Uh so these are the
11:57these are the two play on the margin. as
11:59uh Ratu Kazad here as regarding your
12:02question on the reappointment of the CEO
12:07as you alluded to you know the new
12:10chairman has just taken over and uh
12:14which is you know as recent as yesterday
12:16and today uh the GNRC and the board is
12:20seized of the matter and they have been
12:23it's work in process uh as soon as they
12:28are able to conclude we will come out
12:30and inform all of you people and the
12:33exchanges as to the outcome of the
12:36exercise.
12:38>> Um
12:39>> you know my questions on FCNRB have not
12:42been answered and uh you know Mr.
12:44Jagisha if you could also add on uh in
12:46in terms of loan growth incremental loan
12:48growth where that's coming from of
12:50course we're seeing this uh you know
12:52corporates coming back to banks uh you
12:53know away from the bond markets that's a
12:55trend we're seeing across banks but for
12:57you in particular where do you see the
12:59opportunity and FCNRB what's the target
13:02>> okay let me answer this FCNRB and then
13:04Ka will answer on the loan part of it
13:07number one is there are three streams of
13:09FCNR that we are targeting number one at
13:12six 6% plus it's extremely attractive
13:16even for someone in different parts of
13:20the world who are probably getting a
13:22four to four and a half% as well. So
13:24there is a even without leverage it is a
13:27very attractive and you'll be surprised
13:28how small ticket NRI customers are also
13:32lining up to this kind of um um you know
13:36opportunity.
13:38So we are focusing on that. We have
13:41raised a substantial amount even in just
13:43the last few days. The numbers we don't
13:46want to declare at this juncture but you
13:49will see over the next 3 months at the
13:51right time when the when the when the um
13:56uh when the issue closes I think we may
13:58put it up in the public domain. The
14:00number two is on the leverage part of
14:02it. There are two types of leverage.
14:04Number one is our own leverage and
14:06number two is the leverage that our
14:09customers can take from foreign banks in
14:12certain jurisdictions.
14:14The own leverage is a function of how
14:17much we get in as a inflow through our
14:20borrowings and as you know we have
14:22already raised about 750 million maybe
14:25the first to begin with and we do have
14:28plans to raise further borrowings to be
14:30able to provide le own leverage to our
14:33best set of customers and that is a work
14:36in progress and that is in terms of
14:39leverage obviously since the amount is
14:41rationed so we would want to provide
14:44At this juncture somewhere around nine
14:46times leverage is what we're
14:48contemplating. If at all there is a need
14:50to step it up, we will re-examine and
14:53recalibrate it going forward. As regards
14:55the third stream which is the customers
14:58going and taking leverage from our
15:00counterparty banks where we have tied
15:01up. Obviously the leverage ranges
15:04between 9, 12 and 15 or 19 depending on
15:08the jurisdiction and this is something
15:11that is uh dependent on the country
15:15regulations and also the counterparty
15:17banks the thought processes etc.
15:20Therefore, we had a fair amount of
15:24relationship which we are harnessing
15:26with counterar banks to be able to
15:28provide this kind of leverage to our
15:30customers and all in all I think the
15:32momentum will start to pick up now. It
15:34is just a matter of time. I think we are
15:37we have time till September and we
15:39should be whil I'm not going to disclose
15:41the number that we are aiming for but I
15:44think it should be a very healthy number
15:46vis what the system is going to be
15:48mobilizing uh over the next couple of
15:51months thank you
15:54>> thank you very much may I request to
15:56kindly come back for a follow-up
15:57question please
15:59thank you
16:02next question is from line of Hanseni
16:04from money control please go ahead
16:08Uh hi hi good evening. A couple of
16:10questions. Uh I'll I'll start with the
16:13one on FC and RB. Uh Dubai is turning
16:15out to be an important center uh for the
16:18entire uh Indian banking system. Uh
16:21there is a ban on HDFC as far as new
16:24bookings are concerned from uh DIC. How
16:28are you mitigating that aspect? How are
16:30the flows from Dubai particularly been?
16:32Um that's one and I'll come back for my
16:34second question sir.
16:36>> No absolutely right. I think we do have
16:38a little bit of a handicap there in that
16:40particular region. One is um the kind of
16:43embargo that we are seeing from uh the
16:46UAE regulator. Two is there is a kind of
16:49a advisory by the central bank of UAE on
16:52all the rep offices in the in the region
16:55itself. So these are some of the
16:58constraints but we are not sort of
17:00necessarily waiting and um for that we
17:03are we have alternate strategies which
17:06we are deploying in terms of um you know
17:10even sort of reaching out
17:13from India which is allowed um as
17:17product specialists and that is what is
17:19happening uh uh today and we we may have
17:23other strategies as well to reach out to
17:25some of the customers is within the
17:27realms of the of the regulations as
17:30well. Um you're you're absolutely right
17:32in terms of the restrictions and the
17:34constraints but we do have plan A, plan
17:37B and plan C as well.
17:40>> That's assuring. Uh now that uh Bank of
17:43Boda has looked at settlement for one of
17:46its old pending litigations, what would
17:49HDFC Bank stand on be as far as uh uh
17:52the 81 issue is concerned? Would you be
17:55open to offering the bond holders some
17:57settlement? Uh this is more as a
18:00continuation of the second first
18:01question. Uh let me also put my second
18:04question here. Um Sashi, I'd like to
18:06understand from you what has been how
18:09has it been uh between you and Mr.
18:12Kumar. Uh I'm presuming this would this
18:15would have been the first board meeting
18:16full-fledged board meeting uh that he
18:18sat through. Did the NRC meet ahead of
18:21today to discuss your reappoint? uh as
18:24we're getting closer and closer to
18:26October deadline uh we're getting a
18:28little anxious whether it's going to be
18:31you unopposed or would your board
18:33recommend you plus+ as well some bit of
18:36color on that Sashi would be extremely
18:38helpful
18:39>> I I I'll do the first part Sashi in
18:42terms of uh uh the bonds or whatever
18:45right uh first that's very hypothetical
18:47in terms of uh uh what what is it uh
18:51claim or settlement or whatever because
18:53there is no established uh uh missile or
18:56anything of that sort, right? So, let's
18:57be very clear and so that question is
19:00very hypothetical and let's not get into
19:02uh conversation of things that are up in
19:05the air or or just theoretical with that
19:07that goes to the
19:08>> okay on the second question you know you
19:12know you spoke about the fact that
19:14yesterday and today was the first day uh
19:17of Mr. Kumar um u chairing meetings and
19:22also sort of preciding the his first
19:24ever board meeting today. I think the I
19:28talk on behalf of the other board
19:30members. I think it is it was very uh
19:34very wellreceived very refreshing and um
19:38he obviously he's done a lot of homework
19:41and uh we are very eager to see a a
19:44great partnership between the board and
19:46the management over the next years and
19:50I'm we are very confident about the next
19:53stage of growth as regards you know it
19:56is not it it'll be unbecoming if I were
19:59to talk about myself uh in terms of
20:02whatever the questions that you asked.
20:03So it is much better that if I leave
20:05that question to Mr. Gorucha Gorucha
20:08>> uh Shashi thanks you know Himanji as I
20:12already clarified in the uh response to
20:17Ru earlier uh the GNRC and board is
20:22completely seized of the matter and this
20:26is work in process once we have a
20:30decision from them we will certainly let
20:33all stakeholders know
20:37of the outcome of that decision. So is
20:40it something that is been worked upon?
20:45Answer is yes and we will come back to
20:47you shortly on it. All I can tell you is
20:50that this being the first meeting
20:52obviously you know you need to give a
20:54little bit of a time but my hunch and
20:57feeling and I'm sure Kazad here will
20:59also uh share the orchest similar
21:03thoughts that you know his his deminina
21:08and his endeavor is to minimize
21:10uncertainties in a very short time
21:12period. So that is a signal that came
21:15about and I'm sure um as Kazad is
21:18mentioning just give it a little bit of
21:20time for the NRC and tomorrow to sort of
21:23uh conclude on some of the milestones
21:25that they have given themselves uh for
21:29all the uh necessary actions to be taken
21:33in the rec in the near future.
21:37>> Thank you very much Hams. Can I request
21:39to please come back for a follow-up
21:41question?
21:43Thank you.
21:45Next question is from the line of Pu
21:46Shukla from from NDTV. Please go ahead.
21:55May I request to unmute your line and
21:56proceed with your question.
22:03Due to no response, we move on to the
22:05next participant.
22:06Next question is from land of Saloni
22:08Shukla from Economics Times. Please go
22:10ahead. Yeah. Hi, good evening sir. Uh so
22:14just wanted to understand on the loan
22:16growth uh front we are seeing uh strong
22:19growth coming from um business banking
22:22and corporate uh but retail um you know
22:26isn't growing a lot. uh I know it's a
22:28large base but uh can you give some
22:31color on uh where all these three
22:33businesses are headed and just one
22:36clarification uh you know you had
22:38earlier maintained that in FY27 you
22:41would grow ahead of the system but did
22:43that change anyhow due to the West Asia
22:45war if you could clarify that thank you
22:49>> yeah so Salony I'll first take the
22:54second part of your question in terms of
22:57the retail growth you know if we look at
23:00the retail growth on a year-on-year
23:03basis I think you know there has been a
23:05significant movement in the way we have
23:09approached it uh you know to demonstrate
23:12in terms of numbers if we look at first
23:15the mortgages book we've seen a good
23:18increase in the book in terms of our
23:21annual dispersements our dispersements
23:24on a year-on-year basis has grown at
23:26approximately 14%.
23:29If I further drill down into the other
23:32core retail books which is our wheels
23:35business, we've seen a very healthy
23:37growth out over there again of about 20%
23:41in terms of our annual disbbursements.
23:45uh if I further take it to the personal
23:48and business loan segment, we've seen a
23:51near equivalence of 2021%
23:54in terms of our dispersement growth out
23:56over there. We also have you know
23:59introduced certain new products in our
24:03bouquet of retail offerings. This
24:06includes you know the gold loans as well
24:08as the microlo loans which we call as
24:11the dukandar loans and both of that has
24:14also seen very good traction though
24:17coming off a small base we have seen you
24:20know our goal loan book grow at about
24:2235% on a yearon-year basis
24:26>> could you give me the size of the gold
24:28loan book
24:29>> so we have uh we have put it out in the
24:34>> in the pack it is roughly
24:36It is roughly as it stands as of 30th
24:38June about a little over 25,000 crores.
24:43>> Okay.
24:44>> Okay. So that should give you a quick
24:46flavor as to how the whole retail
24:48momentum has been growing year on year
24:51across a range of our core retail
24:54products and we see that demand
24:57continuing and uh you know the momentum
25:01is very much there. If you then move to
25:04the uh theme segment of which business
25:09banking is the largest component,
25:12you would see that we have grown on a
25:14year-on-year basis at over 22% in
25:18business banking and on the whole small
25:20and mid-market, we've been at roughly
25:23about 18.5 to 19%.
25:26This this certainly is you know uh
25:30continuing on the growth journey that
25:33we've had in our MSME business. Uh in as
25:37much as you know today we are number one
25:42in 15 states in MSME and we are in the
25:47top three in the 25 states in the
25:50country.
25:52uh you would also recognize that the
25:57ECLGS 5.0 0 scheme which has been
26:01launched with us being a dominant player
26:04on the landscape in terms of MSME. We
26:07are amongst the largest in terms of our
26:10dispersements
26:12uh under the ECLGs scheme uh you know
26:16amongst the top two at at sometimes one
26:19but it's a dynamic movement until the
26:22scheme is available till 30th of
26:24September
26:26so or in fact 31st March u uh so we we
26:31we see that business continuing to grow
26:34and perform at the uh coverage I have
26:39mentioned.
26:40Then coming to the corporate and other
26:44segments, we've also seen a good growth
26:46that you would have witnessed in the
26:48last quarter and that continuing in the
26:50current quarter as well. You know the
26:53corporate and mid-market
26:56segments uh along with other wholesale
26:59has grown again at about 18 19%.
27:03Uh so that should give you a good flavor
27:06about the growth that we are seeing in
27:10the consumption side representing the
27:13retail growth the midmarket as well as
27:16corporate. So all the three segments uh
27:20continue to perform along the expected
27:24lines and along the uh positive path
27:28that we see it continuing.
27:31Sir on corporate is it capeex or general
27:34uh working capital demand and which are
27:36the sectors?
27:38>> Okay. So it's it's been a mix of both.
27:41So you know because markets had been
27:43volatile you had seen some amount of
27:46bond demand uh shift from the bond
27:49market to the corporate loan market. So
27:52that led to a little more of term coming
27:55in. It's also been a good amount of
27:58working capital given commodity prices
28:01had been elevated and people needed to
28:03draw on their working capital lines. So
28:06it's been an equal mix I would say
28:08between the term and working capital
28:13in terms of the sectors you know whilst
28:16it's been well spread and we you know
28:18publish overall industry-wise percentage
28:22of sectors no significant movement out
28:25over there but just to call out a few
28:27sectors we've seen growth happening in
28:30the electronic sector auto and auto
28:33ancillary sector the renewables as well
28:36as some segments of the commodity sector
28:40where we've participated.
28:46>> Tony, can I request to come back for a
28:48follow-up question, please?
28:49>> Okay, sure.
28:51>> Thank you very much.
28:53Participants, kindly limit yourself to
28:55one question per participant.
28:57Next followup, next question is from
28:59line of Subra Panda from Business
29:00Standard. Please go ahead.
29:04>> Hi. Uh, thank you. Uh my question is on
29:06the FBI front. I mean uh uh you've
29:09tapped the dollar bond market the first
29:11and got really great spreads. You're
29:13saying you'll tap it again uh for your
29:16own to give over your own leverage. So
29:18how much could that be because spreads
29:19have tightened since you tapped at T
29:21plus 90. Um also how much of own
29:25leverage you can give and how much of
29:26SLBC's you will give if you can give a
29:29share like 70 13 flavors of SLBC's in
29:31that sense. Um also the fact that you
29:34know we have had a lot of estimates from
29:36foreign brokerage houses in domestic
29:38brokerage houses on how much uh the
29:40industry can draw through the FCNRB
29:42scheme. So I mean as one of the largest
29:45banks in the country can you give us an
29:47estimate as to how much the whole
29:48industry can draw on on on the scheme.
29:52Uh lly just on I mean what is your plan
29:53on the acquisition financing front?
29:57See on FCNR. Um in terms of the fact
30:02that we have seen
30:05the you know when we when when the
30:07scheme was launched at that point in
30:09time obviously
30:12the the
30:14impact of taxation in the hands of the
30:17consumers of the NRIs were was not sort
30:20of really assessed and subsequently
30:23we've realized that um jurisdictions
30:27outside of the Middle east and Singapore
30:30it does not make economic sense to um
30:34take a leverage and uh you know invest
30:37in FCNR because u the taxation is on a
30:42gross interest basis so it does not make
30:44economic sense so that's number one so
30:46therefore the so-called um you know
30:50large part of
30:52OCIs and NRIs in the west in Europe and
30:56United States and Australia probably go
30:59out of this particular window. So that
31:01itself sort of reduced the opportunity
31:04size. Um so what was touted as about 75
31:09to 80 billion or 60 to80 billion
31:13somewhere around that you know uh get
31:16scaled down because of that as well.
31:18That's number one. Number two, we've
31:20seen, you know, with uh the the
31:25liquidity even in West Asia, considering
31:28the kind of uh uh considering the kind
31:31of uh conflict that's going on, I think
31:34the central banks
31:36especially of some of the
31:39West Asian countries maybe like Oman or
31:43UAE have sort of put in some kind of
31:46restrictions on the on the on leverage
31:50on the either uh dissuading leverage or
31:53capping leverage or wanting to keep
31:55liquidity buffers within the countries
31:59for any contingent events as well. So uh
32:04what we had in visage in terms of
32:06country limits I think by the
32:08counterparty banks have also sort of
32:10scaled down. So the consensus and I'm
32:14not an expert. I let me put that caveat.
32:17I'm just going by some of the experts um
32:20who are um uh who have sort of mentioned
32:24that what was 60 to uh 80 could be
32:28somewhere around the 50 55 is what um
32:31the country is expected to get. Uh so
32:34let's hope and pray that it does. As
32:36regards your other question on FCNR
32:39which is um
32:42which is the proportion now obviously
32:45you know we can provide leverage
32:48depending on how much of inflows we get
32:50from our borrowing now um the borrowing
32:56obviously we need to balance off as
32:58you've heard Shiny around he wants to
33:01minimize the percentage of borings to
33:05total liability ities. So it's a kind of
33:08a you know a kind of a tight balancing
33:10that we have to do. So I I believe uh we
33:14may want to do a proportion which was
33:18somewhere around one/ird of the total
33:21mobilization that we're expecting to
33:23[clears throat] be uh own leverage and
33:26the balance could be um combination of
33:30an external leverage and some amount
33:32coming in directly as pure FCNR flows
33:40>> on the borrowing front I mean 750 you
33:43have borrowed how much more can you or
33:45are you looking to
33:47>> No it'll be market dependent suba
33:51again we are part of the market uh we
33:54hope to do best in in the circumstances
33:57uh there is no one particular number or
33:58there is no one particular thing that we
34:00we want to be uh speaking about uh we
34:03are we are in the process of execution
34:05and when it is done we will talk about
34:07it
34:09>> thank you subata Can I request to please
34:11come back for a follow-up question?
34:15Thank you. Next question is from the
34:18line of Cheyen Go from Mint. Please go
34:21ahead.
34:23>> Yeah. Uh, hi sir. Um, what kind of
34:26competition are you seeing um in the FNR
34:29market? You, you know, you're offering
34:306% for the 5year deposit. There are some
34:33that are offering more um on that. um
34:37how how important is the rate here and
34:39and are the investors looking at it more
34:41closely right now uh that's the first
34:43question on competition second is uh
34:46while while you said that the board is
34:49seized of the matter of the CU
34:51appointment uh my specific question is
34:54did the NRC meet today on on this or or
34:58that is going to happen at a later date
35:00thank you
35:02>> second question first we are not talking
35:04about internal meetings and and our
35:06governance and constitution of how we
35:08operate. Let's leave that to the side.
35:10And as far as the uh FCNR rates are
35:13concerned, uh rates are very important
35:15for the bank, rates are equally
35:17important for the customer. And uh yes,
35:19we we do measure and manage through the
35:22competition process of how it evolves.
35:24Uh but then I do want to to make a point
35:27that it is not just about the rates. Uh
35:29if it's just about the rates and getting
35:31the volumes, you know that we can put
35:32the rates on and get the volumes. It is
35:35about building customer relationship. We
35:37are not trying to do something that's a
35:38one-off in terms of get the deposit and
35:41forget about the customer. We want
35:42something that is can be an ongoing
35:44relationship and this could be existing
35:46customer with whom we already have
35:48relationships with whom we want to
35:49leverage and it could be new customers
35:51with whom we see potential to do greater
35:54business in times to come. Uh so that's
35:56the kind of mindset with which we are
35:57operating. Uh certainly rates is in top
36:00of our mind but not the only uh item
36:03there.
36:04Okay. And and so far whatever has come
36:07in which which
36:13>> well uh that was the management of HTFC
36:16bank and on that note we're going to
36:18wrap up uh this special earning central
36:20with all of the big bank earnings that
36:22have reported their first quarter
36:23numbers today. It's a wrap on this show,
36:25but do stay tuned for an exclusive
36:27conversation that's coming up with Pavan
36:29Kumar Chandana, the co-founder and CEO
36:31at Skyroot, which has completed India's
36:33first successful private sector launch
36:36into orbit in just a bit. Stay with us.

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