HDFC Bank: Growing Customers, Shrinking CASA?


EXECUTIVE SUMMARY. HDFC Bank’s low-cost liabilities strategy of focusing on huge numbers of new client acquisitions in the semi-urban and rural centres may be getting large numbers of new customers, but is not resulting in significant growth in current and savings account deposits (CASA). The pressure on CASA appears to be an industry-wide problem, on account of falling interest rates and the squeeze on corporate liquidity due to the economic slowdown. HDFC Bank believes that growth in customer acquisition can alleviate its situation in the present economic environment. While its strategy may assist the bank in defying the tide, the fact remains that the new CASA liabilities will not be as lucrative as in the past.