Under its rural sustainable livelihood initiative, HDFC Bank on Friday offered loan to its 20th lakh customer. Aditya Puri, managing director, spoke to Sandeep Singh about his optimism on growth. Excerpts:
The finance minister has asked banks to reduce rates for auto and consumer durable loans. Will HDFC Bank cut rates soon?
The government is giving capital to public sector banks for consumer goods loan at lower rate. Our rates are competitive and any reduction in our rates will be based on competition.
What do you think will be the growth rates for the
remaining part of the year?
The second quarter will not be good but third and fourth should be better. Agriculture will add about 30-40 basis points, others may add another 30-40 bps. The growth for the year can be anywhere between 4.7 and 5 per cent.
What is your expectation on credit and deposit growth for the year?
Once liquidity comes in and growth picks up, both will improve. Credit growth could be around 15-16 per cent. Since the deposit base is larger than asset base, a 13 per cent growth is enough to sustain 15 per cent credit growth.
What is your sustainable livelihood model and why do you think the micro finance model failed?
We are creating productive capacity, which will ensure that he will live, repay and we are able to live. If you give a poor man loan for consumption, he was a poor man before and now he will be a poor man with a loan. The basic flaw with MFI model was that if you donít create earning capacity, how will he repay your loan? They were giving loans for consumption to poor people.