Daijiworld Media Network – Mumbai
Mumbai, Jun 11: HDFC Bank could emerge as one of the biggest beneficiaries of the Reserve Bank of India's latest measures aimed at boosting foreign currency inflows, according to global brokerage firm Jefferies.
The RBI recently reopened the Foreign Currency Non-Resident Bank (FCNR-B) deposit window and permitted External Commercial Borrowing (ECB) raisings with hedging support, as part of efforts to strengthen foreign exchange reserves and encourage capital inflows.
Jefferies noted that during a similar FCNR-B scheme introduced in 2013, HDFC Bank mobilised the highest amount among Indian banks, raising around USD 3.4 billion. The scheme had collectively attracted about USD 34 billion, including USD 26 billion through FCNR-B deposits and USD 8 billion via ECB borrowings.
According to the brokerage, HDFC Bank's strong performance under the earlier programme enabled it to access a larger pool of funds, supporting both business growth and profitability.
Jefferies also pointed out that the RBI's current framework is more liberal than the 2013 scheme. Under the revised measures, the central bank may bear the full hedging cost on eligible FCNR-B deposits, while such deposits have also been exempted from Statutory Liquidity Ratio (SLR) and Cash Reserve Ratio (CRR) requirements.
The brokerage, however, said clarity is awaited on whether depositors will be allowed leverage facilities similar to those available during the 2013 programme, which significantly contributed to the scheme's success.
Separately, HDFC Bank continues to receive positive assessments from market analysts regarding its business prospects. Brokerage firm Axis Direct recently highlighted the bank's strong corporate lending momentum, driven by sectors such as electronics, renewable energy, food processing and semiconductors.
The brokerage also cited growing opportunities in project financing and supply-chain financing, while noting improving traction in retail lending segments including vehicle loans, personal loans and housing finance.
Axis Direct expects further growth through branch expansion, digital banking initiatives and stronger engagement with salary account customers, and has assigned a target price of Rs 975 per share for the stock.
In recent months, HDFC Bank has faced scrutiny over certain governance-related developments, including the resignation of part-time Chairman Atanu Chakraborty and allegations involving Managing Director and Chief Executive Officer Sashidhar Jagdishan.
However, both the Reserve Bank of India and the Securities and Exchange Board of India (SEBI) have expressed confidence in the bank's governance framework. The Bombay High Court also quashed an FIR filed against Jagdishan in connection with the Lilavati Trust case, observing that the complaint was linked to the bank's efforts to recover outstanding dues.
Following Chakraborty's resignation, the RBI stated that HDFC Bank, classified as a Domestic Systemically Important Bank (D-SIB), continued to maintain strong financial health, professional management and robust governance standards.
Industry observers believe that the RBI's latest FCNR-B measures, coupled with HDFC Bank's strong business fundamentals, could provide fresh momentum to the lender's growth trajectory in the coming months.