HDFC Bank Ltd., India’s most valuable lender by market capitalization, sees tentative signs of a revival in rural areas at a time when the wider economy is sputtering.
HDFC Bank Ltd., India’s most valuable lender by market capitalization, sees tentative signs of a revival in rural areas at a time when the wider economy is sputtering. “The recent loan outreach programs underway in rural areas have given us the sense that the consumption in rural and semi-urban areas is turning more positive,” HDFC Bank Executive Director Kaizad Bharucha said in an interview last week. The rural and semi-urban sector, which accounts for at least half of India’s output, got 48% of the bank’s total loans as of end-September.
Prime Minister Narendra Modi’s government has unveiled several steps to boost the economy, which is growing at its weakest pace in more than six years, including a surprise $20 billion corporate tax cut. The Reserve Bank of India is expected to cut interest rates again this week, after Friday’s report that gross domestic product growth slowed to 4.5% in the September quarter.
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For HDFC Bank, the weaker economy had led to a slowdown in loan growth, which eased to 15% in the September quarter from 23% a year earlier. But it remained healthy compared with the overall banking system which saw credit growth slowing to a two-year low just above 8%.
Source: Financial Express
