(Bloomberg) -- The battle for deposits among Indian lenders is unlikely to abate, a senior official at Axis Bank Ltd. said on Monday, with customers seeking higher returns on their investments.
The fight is pushing Axis Bank — among the top private sector lenders — to work on a number of strategies to shore up its liabilities business, Deputy Managing Director Rajiv Anand told Bloomberg TV's Rishaad Salamat and Haslinda Amin. Those include building partnerships with physical and digital partners and leveraging the bank's some 5,000 branches, he said. The bank plans to add another 500 branches this year, Anand said.
“I think the battle for deposits is never going to go away,” he added.
Rising loan demand from companies and consumers has pushed year-on-year credit growth in India to 20.2%, having hit decade highs in recent months. However, the deposit mobilization has failed to keep pace, growing year-on-year at 13.2%, according to the latest weekly data from the Reserve Bank of India. This mismatch has forced bankers to seek innovative ways to lure deposits.
Read: Bankers Wielding Megaphones Tout for Deposits on Indian Streets
Axis Bank, which acquired Citigroup Inc.'s retail portfolio this year, is benefiting from strong consumer demand in Asia's third-largest economy, Anand said.
Spends on credit cards are strong and growing on a monthly basis. The bank, however, does not plan to change its allocation between retail and corporate lending materially, though “we are certainly looking at increasing the unsecured portion of our retail portfolio just a little bit,” Anand said.
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