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HDFC Bank’s deposit franchise shows cracks as retail share falls, wholesale funding rises

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HDFC Bank’s deposit franchise shows cracks as retail share falls, wholesale funding rises

HDFC Bank’s deposit franchise shows cracks as retail share falls, wholesale funding rises

Retail deposits accounted for 55.9% of total deposits in FY26, down from 56.7% in FY25 and 58.1% in FY23, pointing to a gradual weakening in the granularity of the bank’s deposit franchise.

CD issuances peaked at Rs 913 billion in Q4FY26, up from Rs 538 billion a year earlier, while the three-month average CD yield rose to 7.2%. The share of the top 20 depositors increased to 4.8% in FY26 from 4.3% in FY25. Overall deposit market share rose to 14.2% in FY26 from 13.8%, driven by gains in term, current and savings deposits. LCR declined to 114% from 119% as net cash outflows rose 12% to Rs 6.8 trillion, outpacing the 7% growth in high-quality liquid assets.

HDFC Bank ’s liability profile came under pressure in FY26 as the share of retail deposits declined further and the bank increased its reliance on wholesale funding , even as its overall deposit market share improved. 1% in FY23, pointing to a gradual weakening in the granularity of the bank’s deposit franchise. The bank also stepped up its use of Certificates of Deposit (CDs) to supplement deposit mobilisation and meet funding requirements amid tight system liquidity and credit growth outpacing deposit growth. 8% in Q2FY26, according to JM Financial.



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