Forbes India to HDFC Bank’s Executive Director Paresh Sukhthankar on the secret mantras behind the bank’s extraordinary success. Here’s what he said
Forbes India: Your bank grows at 30 percent every year. How do you do it?
PS: There’s nothing magical about a particular number. The rate at which you compound could be anything. We have not really ever had a particular number in that sense. What we’ve done consistently is grown at a pace a little faster than the banking system. We recognise that the banking system grows at a certain rate: That is a function of the growth of the economy and a certain multiple to that.
Traditionally, the banking system has grown at 2.5-3 times the real GDP growth. We have grown at some pace faster than that. When we were much smaller, we were growing at 7-10 percent faster than the system but in the last 5-10 years, we’ve been growing at somewhere between 4-5 or 3-6 percent faster than the banking system. Which means we are gaining market share. The important thing which we’ve done consistently is that the growth in market share or volumes has been achieved while maintaining a more balanced/stable net interest margin and within the bank’s asset appetite in terms of asset quality (within the bank’s risk appetite).
FI: How does the costing work?
(This story appears in the 09 August, 2013 issue of Forbes India. To visit our Archives, click here.)