Internal and external investigations reveal no case of money laundering at HDFC Bank, executive director Paresh Sukthankar said on Tuesday. In an interaction with the media after the results were announced, Sukthankar said there was no systemic risk or vulnerability. Excerpts:

What are the findings of internal and independent investigations into the alleged laundering issue?

There have been multiple agencies and institutions that have investigated the matter and we had an internal audit and an independent forensic fact finding review. The regulators have also been investigating the matter. In all the three cases, no transactions that have been alleged in the sting operations were found to have taken place. This, to a large extent, vindicates our belief that there is no systemic risk or vulnerability here. We do have systems and processes in place which appear to have sufficiently mitigated the risk of such transactions actually taking place. We do understand there is a larger thematic review being conducted by the regulator around a range of issues across the banking system and if there are any areas of improvement, those will obviously be taken on board, the moment they are communicated to us.

There has been some reclassification in the balance sheet this quarter?

The first change relates to retail loans where there is an acquisition cost or a dealer commission. Since there is no regulation under Indian GAAP or RBI guidelines, we were followingUS GAAP and adjusting this cost with the loan yield. However, RBI wants us to treat this acquisition cost as an operating expense and not net it off against interest income. To that extent, the interest expense comes down and the operating expense goes up. Also, we wrote back recoveries on the provisions side but since most public sector banks, however, treat recoveries as other income, we were asked to follow them.

What kind of growth do you see for in FY14?

Our model is that we would continue to grow a little faster than the banking system. So if you look at a 5.7-5.8% growth that would translate into a slightly higher credit growth than in FY13 and we would grow a bit faster. In FY13, the system ultimately grew at 17% and we grew at 22%. The pace at which the system will grow is anybody’s guess, but if the economy grows a little faster, than in FY13, I think it is a fair expectation that loan growth will be about 100-150 basis points higher this year.

Do you think retail loans will drive growth going ahead?

Retail would certainly continue to chug along but I would not be surprised to see some resurgence on the wholesale side as well. Arguably, what has helped retail loan growth is that domestic consumption has continued to grow. But if you are looking at the economy picking up from here, what would be required is a pick up in capital expenditure which would automatically trigger some form of corporate loan growth. I do believe like this year, both engines will be chugging along. If the retail piece grows even at last year’s levels, we should be happy.

RBI meets next week to review monetary policy?

We are hoping for a cut in CRR. We believe there is still room for some liquidity to be infused into the system, to facilitate better transmission. Having said that, I must mention that we were the only bank that responded in terms of the rate cut, the second time over. As of March 30, we reduced our base rate to 9.6% from 9.7%. So I guess we are a little ahead of the curve there.