Demonetization is behind us, it’s now as if nothing had happened: HDFC Bank ED
While large companies have largely exploited the bond market over the past two years for their financing needs, HDFC Bank has focused on emerging companies (or mid-sized companies) as an important area of opportunity to develop. its loan portfolio.
In an interview with Activity areaExecutive Director Kaizad M Bharucha said that India’s second-largest private sector bank’s emerging business loan portfolio has doubled to 60,000 crore in the past three years. The jump in this portfolio, which includes companies with revenues starting between 200 and 300 crore yen and going up to 700-800 crore yen, is driven by the provision of end-to-end banking solutions, did he declare. Excerpts from the interview:
Why are you focusing on the mid-size business segment?
A medium-sized business would invariably have a basic working capital requirement that must be met by the banking system. And when you measure it with a certain segment of large companies, they really don’t need working capital, they’re self-funded, so to speak. In this context, yes, mid-sized companies as a segment would tend to have more financing needs that need to be met. Emerging verticals have grown somewhat more than some of the other verticals in wholesale banking. Overall, the wholesale banking portfolio is growing by around 20%.
Like large companies, do mid-size companies also access the bond markets?
There are two parts to this: one is the Commercial Paper (CP) market and the other is the bond market. So where short-term working capital needs exist, we have seen a number of moves over the past year by mid-sized companies to tap the CP market. And this therefore channeled loans and advances from banks to the investment portfolio. So we’ve seen this happen, certainly in the last 12 to 18 months.
What was the impact of demonetization on your loan portfolio?
When the demonetization happened, the first month was clearly a slow one. We said it would take several quarters. But we saw a complete “V” or “U” recovery.
So I think the demonetization aspects are behind it. I think businesses, midcaps and SMEs are back. This speaks well for the economy as a whole.
It’s business as usual and we saw it in our portfolio.