Mumbai: HDFC Bank’s part-time chairman Rajiv Kumar on Wednesday reaffirmed the lender’s commitment to strong governance standards and expressed confidence that key operating metrics, including the current account savings account (CASA) ratio and net interest margins (NIM), will improve over the coming quarters.
Addressing shareholders at the bank’s 32nd annual general meeting (AGM), Kumar said HDFC Bank’s core values, governance framework and internal control mechanisms remain robust and will be further strengthened.
“With a firm commitment to safeguard the trust that our shareholders, customers, and stakeholders have placed in us, the bank’s ethos and internal control systems are strong. I assure you that this will be further strengthened and empowered,” Kumar said in his first AGM address as part-time chairman.
His remarks come months after the unexpected resignation of former part-time chairman Atanu Chakraborty in March.
Chakraborty had stepped down citing differences related to ethics and values that he said were not aligned with his personal beliefs.
Subsequently, an independent legal review conducted by the bank found no evidence to support the ethical and governance concerns raised.
Kumar also signalled that future appointments to the bank’s board would be guided strictly by merit, integrity and professional competence.
“It would be difficult to find that kind of excellence, but we will induct new directors who are best in class, strictly with the sole consideration of merit, integrity, and professional excellence,” he said.
HDFC Bank has faced heightened scrutiny from shareholders and regulators in recent months, particularly regarding the reappointment of Managing Director and Chief Executive Officer Sashidhar Jagdishan for a third term. However, Kumar did not address the matter during his opening remarks at the AGM.
On the business front, Kumar acknowledged that the merger with mortgage lender HDFC Limited had resulted in structural changes to the bank’s balance sheet, putting pressure on both CASA ratios and net interest margins.
Despite these challenges, he expressed confidence that the metrics would improve as the bank strengthens its deposit franchise and focuses on growing consumption-led lending.
“The merger has resulted in structural changes in our balance sheet, primarily in the CASA ratio and our NIMs. As we continue our progress on incremental deposit market share, and with stepped-up focus on the consumption side of the economy, we are confident of improving these metrics in a few quarters,” Kumar said.
(IANS)
