Operator: Next question is from the line of Kunal Shah from Citi Group.
Kunal Shah: So given that the overall liquidity is tight plus the deposit traction all said and done this quarter has not been very encouraging. So when do we see in terms of tweaking the rates, given that now at least the repo rates have sustained, would we ever look at raising deposit rates beyond 7.2% just to make sure that we are on our target to get the deposits and at least sustain the growth momentum even on the asset side. So will there be a thought — no doubt, you have earlier said that we will look at branch expansion that’s going pretty slow. Even in terms of like activation of the field force still not that great response. So at what time do we look at tweaking the rates just to ensure the deposit traction is what we were envisaging earlier, yes?
Srinivasan Vaidyanathan: Okay. See, deposit pricing is not a tool that we are having in our sales and relationship process, which means it is not a driver. The conversation would never go to say, I’m the best price deposits, come here. It’s not a conversation because that’s how — if you look at some of the comparative pricing on our deposits with our peers, we are more or less in that line, right, with our top peers, that’s the kind of a pricing that we are positioned to. So we’re not trying to differentiate on the pricing. We’re trying to differentiate on other offering features. That’s one on that. Second, in terms of the market share, you touched upon the growth rate and the market share. I do want to allude to say that we do believe that on an incremental basis, 18%, 20% market share, we do garner, right?
That’s part of the — whatever is the size that we have got, whatever is the level at which we are growing, we continue to maintain that superior rate of growth to the market, gaining market share on an incremental basis, getting that in the high teens to 20 type of incremental market share. Rates are not a play. And that is part of the reason why the non-retail deposits de-grew by 3.3% in this quarter.
Kunal Shah: Yes. Okay. And secondly, with respect to tax write-back. So last time when there was a write-back, you indicated that maybe it might not repeat and we should see it normalizing towards 25-odd percent. But that benefit is still continuing. So if you can highlight in terms of, is it expected to continue what is leading — actually leading to this kind of — or maybe a lower tax rate, I would say? Or may this is like the investment gains, which have been there. It’s on that if you can just highlight that, yes.
Srinivasan Vaidyanathan: The tax benefits that we booked in are consequent to 2 things. One, there were certain favorable orders received relating to eHDFC Limited past assessment. So that’s one. And two, there were some favorable orders received relating to the bank for the past year. So that is based on those assessments, determine that the portions are no longer required. That’s — and it depends on time to time. And there is no such kind of a routine timing that I can predict when these orders come and when we get done. But yes, these are episodic from that sense. We receive favorable orders, the assets and we take it. And in this quarter, we have had 2 of them like that, yes.
Kunal Shah: Okay. So all orders which have been received, which have been favorable, they are more or less accounted for now and [indiscernible] spend?
Srinivasan Vaidyanathan: More or less.
Kunal Shah: Okay. And lastly, if you can highlight in terms of the maturity of the borrowing, HDFC Limited borrowing over next 1 year, which is falling due, okay? And any quarter, we would see any kind of volatility in that maturity?
Srinivasan Vaidyanathan: Maturity profile is 20,000, 25,000. There is no big maturity at least over the next 2 to 4 quarters. It is unevenly there. There’s not a spike of INR 1 trillion going away in a quarter or INR 0.5 trillion going away in a quarter that kind of profile. And I think annually, we do publish the profile of those, and you should soon get to see that, yes.
Operator: Next question is from the line of Chintan Joshi from Bernstein.
Chintan Joshi: Can you hear me?
Srinivasan Vaidyanathan: Yes, Chintan. Go ahead.
Chintan Joshi: So can I go back to the LD ratio discussion? What I’m hearing from you is that it does need to come down, but also growth will remain intact. So I’m trying to square the circle, how — like the only way LD ratios improves is if you grow deposits faster than lending. Is that what we should expect by FY ’25? And the pace of that, if you can talk about — do you have some target in mind? Or do you look at market conditions and do your best? How should we think about this?
Srinivasan Vaidyanathan: Thank you. One thing I do want to mention is that the growth rate — sustainability of the growth rate is not irrespective of what the CD ratio is. CD ratio has to improve, right? As I mentioned, typically, we have been in that mid-80s to high 80s. The merger took it to where it is today, past the 100%. And over a period of time, we do need to bring it down. So we can’t keep the CD ratio to be growing all the time. That’s not a proposition that we are envisaging. So that takes the second part of what you asked in terms of the deposit growth and how you should think about the rate of growth. Yes, we do envisage that the deposit rate of growth should outpace the loan rate of growth. And for the CD ratio to progressively come in and for the economics to work, the deposit rate of growth should be at least 300, 400 basis points higher than the loan growth, only then the economics will work better.
So yes, that is kind of a thought process that we have.
Chintan Joshi: Sir, the other question I have is on borrowings and debt securities. If I look at HDFC Limited balance sheet as of FY ’23, there was about INR 1.7 trillion that was going to mature over the next year as of FY ’23. However, we have not seen that mature. If anything, borrowings have gone higher today than the pro forma combined FY ’23 balance sheets. Is this — what was the thinking behind this? Because one way of looking at this is there was an opportunity to reduce borrowing, but it was not taken because there was profitable lending growth out there. Is that the way you thought about it? Or if you can explain that thinking would be helpful.
Srinivasan Vaidyanathan: Okay. See, in this time period, now 2 quarters have gone by after the merger. And the borrowings have remained or actually gone up in this quarter by almost INR 209 billion it has gone up, out of which about 7,500 is infra bonds, which economics work well, we have taken that. The rest are either market borrowings or other treasury-related actions, right? So it is only one item which is the infra bond, which is the borrowing as such that has gone up. The rest are market-related activities, which are there, right, in that borrowing. The other aspect of it is that should you expect this to go down at the maturity, I think another person was asking about the maturity itself over the next several quarters.
