Will use tax breaks to grow, pass on benefits: HDFC Bank’s Aditya Puri

MUMBAI: As HDFC Bank’s MD and CEO Aditya Puri steps into his final year of a quarter-century career building the biggest and most valuable lender in the country, his competition is no longer

banks

but the online marketplaces he is trying to beat at their own game. In an interaction with newspersons, he speaks of the repositioning of the bank. Edited excerpts:


How much will you save on income tax? How will you utilise it?
I do not have the exact figure. We can lend more, we can spend more to build a bigger brand and give a better deal to customers. From a wider viewpoint, the supply chains of the world are altering and India is the only country to be in a position to get the supply chains here. But they (global companies) are in a bargaining seat, so our tax rate had to be altered.

The big bump in the cash flow can be used for more investment or to give customers a better deal. I think a bit of both will happen. If you see our festive treats, we have a thousand merchants with phenomenal offers and cashbacks from us. And our sales are for three months and not three-four days like e-commerce companies.

Have you stopped competing with banks?
We are redefining the bank. We are saying that we want to be in tune with what is happening in the world — tech-savvy, customer convenience, widest product range. I am positioning myself against all my competitors. What did the e-commerce companies or fintechs do? They did over-the-top, which is riding on my system and providing a service that is convenient and frictionless.

So I said, why can’t I put my own API and provide a frictionless customer journey which customers can trust? We have on-boarded 1,000 merchants on our platform and will on-board 1,00,000 merchants for digital payments under ‘Dukandaar’ scheme.

What is the future of branches?
Large parts of India still need financial inclusion and technology enables you to open very low-cost branches. These low-cost branches help build brand in rural and semi-urban areas. What we called a branch is more sales and service outlets. As customers shift to digital modes for transactions, our ability to scale up operations will grow and we will be able to bring our cost-to-income ratio down by 5%.

Does inorganic growth hold any attraction now?
We do not need acquisitions. At the moment, nothing is under consideration. At the right price, we will see.

Is slowdown causing stress in credit portfolio?
Life goes on, marriages take place, phones get replaced, which is why we have come out with the festival scheme. We are not seeing any loss of permanent jobs. I am not denying there is a slowdown, but we have not compromised on our credit quality and neither the (finance) ministry nor the government has asked anyone to do that. And you don’t need to do that as demand exceeds supply.

The SBI chief had said lenders should work in coordination...
In my view, specific security is specific to the bank. That is the basis of the loan, that is commercial practice and that is global practice. I cannot comment on what the SBI chief said.

When will your successor be named?
We will look and the best available candidate will be chosen. In the meantime, we have de-risked as much as possible by having a very strong second line by hiring experts. A whole lot of people have come in. We will start the process in January 2020. A search committee will look at the firms and a time frame will ensure that it will be smooth with one- or two-month overlap.