HDFC Bank is reportedly in talks with various global lenders to sell $1 billion (₹8,400 crore) of loans to pare its credit book and bring its credit-deposit ratio down to a comfortable level.
Its move comes at a time the Reserve Bank of India (RBI) has been asking banks to step up their deposit mobilisation efforts.
Latest data from the central bank has shown that while deposit growth in the banking system stands at 10.8 per cent, the credit growth is at 13.6 per cent.
A Bloomberg report said that the country’s largest private sector lender is in talks with banks such as Barclays Plc, Citigroup Inc. and JPMorgan Chase & Co.
Apart from these banks, ICICI Bank Ltd is also interested in picking up some of the loans, the report added. The proposed loan portfolio sales, with terms yet to be finalised, could take place through pass through certificates (PTC), a debt instrument that have rights over assets backed by cash flows.
It is expected that the move will enable HDFC Bank to improve its credit-deposit (CD) ratio, which is a measure of how much of a bank’s deposits is being given out as loans.
The lender was reportedly in separate discussions with domestic asset management companies to sell as much as ₹10,000 crore of loans. Earlier, it had sold a ₹5,000 crore loan portfolio in June.
HDFC Bank’s CD ratio stood at 104 per cent as of March 31, 2024 higher than the 85-88 per cent rate in the previous three fiscal years, according to ICRA Ltd.
