Private sector lender HDFC Bank on Wednesday said the reduction in corporate tax by the Narendra Modi government will either lead to investment or price reduction.
In an interview to CNBC-TV18’s Ritu Sing on the sidelines of the Jury Round of the 15th India Business Leader Awards (IBLA), Aditya Puri, managing director, said that the third quarter will be better HDFC Bank than the last quarter.
In terms of credit growth, he said, "I cannot give credit growth for the industry, but we gave our preliminary numbers for this quarter, it is 19.5 and 22 as deposits. HDFC Bank thinks that semi, urban and rural demand is very buoyant. Also, working capital demand has picked up. So we don’t see a problem."
Speaking about demand, Puri said, “The banks will fulfil the demand for credit. We cannot create demand as that will result in non-performing assets (NPAs) so you have to create a genuine demand that you fund. The Reserve Bank of India’s (RBI) data is for the past period. For future period, the growth is coming from everywhere."
“What happened in the past is reflected in the gross domestic product (GDP) numbers, auto numbers, consumer durable numbers and in the agriculture numbers. So, I do believe that we have had a good monsoon, I do believe that based on newspaper reports as well as what is happening to us, auto sales have picked up,” he further mentioned.
"Our lending to autos, two-wheelers and consumer durables have picked up. We are starting to see buoyant demand from semi-urban and rural India. There are sufficient steps that should revive demand to a great extent. If you expect buoyancy all of a sudden, I don’t think I am seeing that. As I said earlier, by Q1, you should see an improvement in GDP," he said.