Bankable by NDTV Profit - Dailymotion

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Watch as bankers lay bare their strategies and expectations, anticipating growth impulses to return.<br /><br />Tune in to BQ Prime's new show "Bankable" with Vishwanath Nair.

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00:00 You said over the last 12 to 18 months liabilities have been a bit of a challenge.

00:04 When this problem started at some point last year, when the rates started turning

00:10 and then everybody was like, okay, now liabilities, pricing has to change

00:13 and people have to retain the deposit base that they have and continue to grow.

00:18 Why has it taken 18 months and why is it still a challenge is my point, is my question.

00:26 I think the pool of money by definition, I mean you are in a tighter liquidity condition.

00:31 Remember that through the cycle, through COVID, we have seen rates go up and down

00:37 by approximately 250 basis points.

00:40 On a post-COVID basis, we have seen a situation where RBI has hiked rates,

00:48 RBI has hiked CRR, RBI has sold dollars.

00:53 And so therefore, that is the one piece, the only way that money goes out

00:58 or into the system is through those RBI mechanisms.

01:01 And RBI by definition has chosen to keep liquidity tight at this point in time.

01:06 And therefore, you have seen that one-year deposit rates have gone to somewhere

01:12 between 7.5 to 8% depending upon which bank you are talking to.

01:19 And therefore, relative to the 3.5% that you are seeing on savings account,

01:24 you are able to get 7.5% on a one-year deposit.

01:29 And so therefore, what I call the cost of laziness is now 400 basis points.

01:34 Remember that the savings account is a transaction account.

01:37 I mean this is what I pay my SIPs through, my EMIs through, my bills through, etc.

01:42 Under normal circumstances, I will sort of let the money lie there.

01:47 But if I now find that I have slightly more money,

01:51 let's say usually I have 1 lakh in the account,

01:54 but now I have 2 lakhs because I have got a bonus or I have saved some money.

01:59 Under normal circumstances, you will let it remain.

02:02 But where I can move, where I can get 7.5%,

02:06 that extra 1 lakh I will now put into term deposits,

02:09 which is really what is happening.

02:11 But remember that interest rates are cyclical.

02:14 It's not as if we have not seen this movie play out before as well.

02:18 I think we are already beginning to see the first signs of central banks talking about cutting rates.

02:25 And I think that cycle will come to India perhaps over the next 6 to 12 months.

02:32 And then this will start to adjust itself.

02:36 And I think this is, if you look at India over a 20-year period,

02:42 we have never had a situation where deposits has been a concern.

02:44 I mean, there's always been lead lags, etc.

02:47 But deposit growth has traditionally been fairly strong for it to support asset growth.

02:53 And I do believe that this will adjust itself over the next 6 to 12 months.

02:57 [Music]

03:01 [BLANK_AUDIO]

Bankable | Axis Bank's Rajiv Anand On Challenge Of Liabilities | NDTV Profit

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Bankable

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