HDFC Bank’s Managing Director and Chief Executive Officer, Sashidhar Jagdishan, has highlighted a significant acceleration in the bank’s deposit growth compared to its loan expansion for the financial year ended March 2025. In his annual message to shareholders, Jagdishan revealed that deposits grew at a pace 2.5 times faster than loans, marking a decisive shift in the bank’s funding strategy after its merger with parent company HDFC Ltd.
According to Jagdishan, this surge in deposits enabled the bank to reduce its credit-to-deposit ratio to 96 per cent by March 31, 2025, down from about 110 per cent at the time of the merger. The reduction reflects a deliberate effort by HDFC Bank to balance its funding sources and lessen dependency on high-cost borrowings, which now constitute 14 per cent of the overall funding compared to previous highs.
The bank captured 14.6 per cent of all new deposits mobilised in the Indian banking system during the last financial year, significantly outpacing its broader peer group. While HDFC Bank accounts for roughly 5 per cent of the nation’s bank branches, it now commands 11 per cent of the country’s total banking deposits.
Loan growth, on the other hand, was intentionally moderated to fortify the balance sheet following the merger. Advances rose by 5.4 per cent in FY25, whereas deposits jumped by 14.1 per cent over the same period. This cautious approach, according to Jagdishan, was chosen to strengthen fundamentals before focusing anew on an accelerated loan growth trajectory. The bank is now positioning itself to grow its loan book in line with industry averages in FY26, with ambitions to surpass system-wide growth in FY27.
Jagdishan stressed that the bank’s strategy has not relied on offering higher rates to attract deposits or loans. Instead, its focus has been on strategic execution and building sustainable financial strength. Maintaining high asset quality, even through volatile business cycles, continues to be a pillar of the bank’s approach.
The CEO described this phase as one of the most transformative for HDFC Bank, as the merger with HDFC Ltd has expanded cross-selling opportunities and deepened the group’s footprint across financial services, including life and general insurance, mutual funds, and brokerage.
The momentum in deposit mobilisation and prudent loan growth sets the stage for HDFC Bank to capitalise on emerging opportunities while maintaining its reputation for stability and low levels of bad loans.