Private sector major HDFC Bank will open between 1,500 and 2,000 branches each year for the next three to five years and will roll out new product features every three weeks, the lender’s Managing Director and Chief Executive Officer Sashidhar Jagdishan said in the bank’s FY22 annual report.
“The branch will be digital from a customer on-boarding and transaction/servicing perspective. It will provide the emotional connect and relationship management necessary for offering financial solutions to our customers. These branches will be small in size and will be phygital relationship centres,” Jagdishan said.
“This will enable us to go after the catchment more aggressively and build the required liability franchise that we are known for, and we are confident that we would execute well,” he added.
As on March end, HDFC Bank’s total banking outlets stood at 21,683, while total branches including 4 overseas ones stood at 6,342. The lender’s total ATMs and cash deposit machines were at 18,130 at the end of March, and it had 15,341 business correspondents under its network.
Branch expansion will help HDFC Bank in deposit accretion and aid in merger of Housing Development Finance Corporation with the bank, analysts said.
“The real concern in this merger is about mobilising a huge pool of deposits to meet regulatory requirements, including CRR/SLR/PSL, and replacing HDFC Ltd's high-cost borrowings to the tune of Rs 4.2 trillion, excluding housing bonds,” says Anand Dama, head of BFSI at Emkay Global Financial Services.
As on March end, HDFC Bank’s total deposits stood at Rs 15.59 lakh crore, up 17 percent on a year-on-year (YoY) basis. Low-cost current account and savings account deposits held 48 percent share in total deposits. The lender’s loan book, meanwhile, rose 21 percent YoY to Rs 13.68 lakh crore.
Digital drives
HDFC Bank could not have grown to be a bank of large scale and increase its market share consistently if it did not focus on expanding technology infrastructure, the MD said.
“Our customers faced some technology-related issues in accessing the bank’s products and services during the previous year, which had led to some regulatory action, last fiscal,” he added referring to the Reserve Bank of India’s (RBI) temporary ban on the bank last year from launching new digital services.
“I am happy to inform you that thanks to the progress we have made on our technology investments, processes and governance, the regulatory actions have been fully lifted. We converted the challenge into an opportunity and have made substantial strides in the way we evaluate, manage and operationalise our technology,” Jagdishan said.
In the next few quarters, HDFC Bank will launch more products and services under its “Digital 2.0” drive, he noted.
A new payments platform for HDFC Bank customers, merchants and a wealth management platform are in the offing, he said, adding that these platforms will be built in partnerships with new-age tech companies.
Further, HDFC Bank customers can expect better services going ahead as the lender has set up a new centre in Bengaluru where an internal team is working on re-writing the mobile and net banking platforms of the bank.
“The entire project will be completed in a 2-year time frame and will allow the bank to own a modern cloud-enabled Mobile/NetBanking platform. Enabling a new-age experience for customers, we will roll out new features every 3 to 4 weeks, in line with digital fintech companies,” the MD said.
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