HDFC Bank plans to sell $1.2bn loan portfolios via pass-through certificates to reduce exposure and improve credit-deposit ratio amid deposit growth challenges in India.

HDFC Bank, India's largest private lender, intends to sell up to $1.2 billion of loan portfolios through a rare debt instrument called pass-through certificates, as it seeks to reduce exposure to certain sectors amid difficulties in raising deposits. The bank is in talks with local asset managers to issue these certificates, backed by a pool of car loans, and intends to improve its credit-deposit ratio, which has worsened as credit growth outpaces deposit growth in India. The Reserve Bank of India has warned banks of potential liquidity issues and urged them to increase deposits and attract more savings.

August 30, 2024
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