HDFC Bank’s CEO Sashidhar Jagdishan said that bank was betting big on five key businesses, even as he acknowledged technical glitches that have impacted consumers.
In the annual report for the financial year 2021, Jagdishan said that the bank had identified corporate banking, lending to micro, small and medium enterprises (MSME), government banking, retail assets and payments as key focus areas going ahead and the growth strategy would be aided by digital channels. He also said that the last 28 months, the bank has been in the spotlight for the wrong reasons when it comes to technology. “As a bank we are certainly sorry for what has happened. And have taken this as an opportunity to improve and redouble our efforts to fix this problem for good,” Jagdishan said in a message to shareholders.
The bank is awaiting directions from the regulator on the temporary halt on sourcing of new credit card customers and digital launches. In an interaction with media on June 17, chief information officer of the bank, Ramesh Lakshminarayanan, had said that the lender was hopeful of coming out of the restrictions imposed by the regulator soon.
In December, RBI a had stopped HDFC Bank from issuing fresh credit cards and announcing new digital initiatives following multiple outages the bank witnessed over the past few years. The regulator also called for a third-party audit of the bank’s IT infrastructure.
In the annual report, HDFC Bank CEO confirmed that audit was over and the report has been submitted to the regulator.
Alluding to the issue of GPS device bundling with auto loans, HDFC Bank’s chief executive Sashidhar Jagdishan said unscrupulous practices of a few people have made everyone resolve for far greater process controls. “I am personally determined to fix this,” he said, while assuring shareholders in the annual report.
On May 28, RBI had a imposed a penalty of Rs 10 crore on HDFC Bank due to deficiencies in regulatory compliance in the GPS case. The case pertains to marketing and sale of third-party non-financial products along with auto loan to bank customers.
During FY21, the net profit of the bank increased by 18.5% year-on-year (y-o-y) to Rs 31,116.5 crore and balance sheet size grew by 14.1% y-o-y to Rs 1,746,871 crore. Gross NPAs, however, increased to 1.32% in FY21 from 1.26% in the previous year (FY20).
Net interest income (NII), an indication of the difference between interest earned and interest paid. grew by 15.5% year-on-year to Rs 64,879.6 crore in FY21.