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finance | IST

IL&FS crisis and NBFC issue is a wake-up call for the financial sector, says HDFC Bank

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Rahul Shukla, head corporate and business banking at HDFC Bank, spoke to CNBC-TV18 about the aftermath of the non-banking financial crisis (NBFC) crisis.

Rahul Shukla, head corporate and business banking at HDFC Bank, spoke to CNBC-TV18 about the aftermath of the non-banking financial crisis (NBFC) crisis.
Speaking about the IL&FS and NBFC crisis, he said, “The message is very simple is that you spend only the cash that you have and that comes back to the asset and liability management (ALM) matching principle in the asset-liability committees (ALCOs) that we go through and that your lending profile and your deposit profile has to be completely matched. That is what it reinforces and every once in a while, you basically get this wakeup call and you go out, look at the robustness of the processes we have looked at and we as a bank are fairly conservative and pretty good in terms of our liquidity situation at this point of time.”
“There are two fundamental drivers of growth. One is the spend on the infrastructure because we have an infrastructure deficit and the other is consumption led growth. Today if you look at just the private sector capex, you have basically strength. It is not immediately visible because there is no big Rs 20,000 crore project coming up, we are used to 10-years ago when there were power projects that were getting announced and so many big projects but individually, in small scales that capex is happening, that does add up and that does come back in Reserve Bank of India’s (RBI) commentary in monetary policy that they are seeing strengthen the private sector capex space,” Shukla said.
 
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