HDFC Bank MD Aditya Puri says more regulations needed for housing finance, mutual fund companies
"Whether demonetisation or GST, you can question the efficiency of the implementation but conceptually you cannot question it. GST is a good reform," says Puri.
- Nov 15, 2018,
- Updated Nov 15, 2018 5:41 PM IST
Aditya Puri, Managing Director of HDFC Bank, said that reforms like demonetisation and GST were good initiatives and that the argument of 'no jobs' in the country was not correct. HDFC Bank, which is the largest private bank in India, is putting a major focus on semi-urban and rural areas, and that half of its business now comes from these areas, he said.
During an interview with the Economic Times, Puri talked about everything from the state of the Indian economy to liquidity crises in non-banking finance companies to the government's demonetisation efforts and jobs scenario in the country. The HDFC boss said he hoped the country's GDP would be 7.4-8 per cent if crude oil prices remain under control. However, he junked the argument that the depreciation in rupee is only due to global factors. "I am of the view that any depreciation that has happened in the rupee is consequent to interest differential and a small part due to the global situation. I see dollar-rupee largely at 72.5 to 74," Puri told the daily.
Puri said more regulations should be enforced on housing finance and mutual fund companies. He said these organisations should also face same "liquidity covers, audit and operation procedures" just like banking institutions. On issues pertaining to the liquidity crunch in NBFCs after IL&FS crises, he said crises in one particular finance company can't create systemic risk in the entire financial system. "It seems to be handled well and largely behind us. People have started lending to the finance companies," he told the daily.
On the completion of the two years of the government's demonetisation drive, Puri said: "Demonetisation led to digitisation", which will make the system more transparent and efficient, especially in semi-urban and rural areas. He maintained these efforts have led to the development of several products, specifically focussing on these areas.
Praising the government's intention behind the structural reforms like Goods and Services Tax and demonetisation, Puri said that conceptually these measures can't be questioned. "Whether demonetisation or GST, you can question the efficiency of the implementation but conceptually you cannot question it. GST is a good reform. As far as demonetisation goes, it brought Rs 3.5 lakh crore into the system," he told the daily.
On the most contentious issue of the RBI-government conflict, he said: "Constructive discussion" between two government organisations can bring good results, and that it's a good thing.
Talking about the job situation in the country, Puri echoed somewhat similar views like Prime Minister Narendra Modi, who had implied that small self-employed people should also be considered a part of the employment. "I have a different view and I may be wrong. Self-employment has created jobs, which is being ignored. Under Parivartan (an HDFC Bank initiative) we have provided livelihood to 8 million families," said Puri.
He added the GDP can grow only if the overall economy is growing so that the argument that there are no jobs is incorrect. However, he said the need is to focus on skill development. Talking about the low non-performing assets of HDFC Bank, he called the bank a "very careful" organisation. The bank's 45 per cent of the lending is to corporates, while 30 per cent is to projects. "This has made the lender the fastest growing bank in the past five years," he said.
Edited by Manoj Sharma
Aditya Puri, Managing Director of HDFC Bank, said that reforms like demonetisation and GST were good initiatives and that the argument of 'no jobs' in the country was not correct. HDFC Bank, which is the largest private bank in India, is putting a major focus on semi-urban and rural areas, and that half of its business now comes from these areas, he said.
During an interview with the Economic Times, Puri talked about everything from the state of the Indian economy to liquidity crises in non-banking finance companies to the government's demonetisation efforts and jobs scenario in the country. The HDFC boss said he hoped the country's GDP would be 7.4-8 per cent if crude oil prices remain under control. However, he junked the argument that the depreciation in rupee is only due to global factors. "I am of the view that any depreciation that has happened in the rupee is consequent to interest differential and a small part due to the global situation. I see dollar-rupee largely at 72.5 to 74," Puri told the daily.
Puri said more regulations should be enforced on housing finance and mutual fund companies. He said these organisations should also face same "liquidity covers, audit and operation procedures" just like banking institutions. On issues pertaining to the liquidity crunch in NBFCs after IL&FS crises, he said crises in one particular finance company can't create systemic risk in the entire financial system. "It seems to be handled well and largely behind us. People have started lending to the finance companies," he told the daily.
On the completion of the two years of the government's demonetisation drive, Puri said: "Demonetisation led to digitisation", which will make the system more transparent and efficient, especially in semi-urban and rural areas. He maintained these efforts have led to the development of several products, specifically focussing on these areas.
Praising the government's intention behind the structural reforms like Goods and Services Tax and demonetisation, Puri said that conceptually these measures can't be questioned. "Whether demonetisation or GST, you can question the efficiency of the implementation but conceptually you cannot question it. GST is a good reform. As far as demonetisation goes, it brought Rs 3.5 lakh crore into the system," he told the daily.
On the most contentious issue of the RBI-government conflict, he said: "Constructive discussion" between two government organisations can bring good results, and that it's a good thing.
Talking about the job situation in the country, Puri echoed somewhat similar views like Prime Minister Narendra Modi, who had implied that small self-employed people should also be considered a part of the employment. "I have a different view and I may be wrong. Self-employment has created jobs, which is being ignored. Under Parivartan (an HDFC Bank initiative) we have provided livelihood to 8 million families," said Puri.
He added the GDP can grow only if the overall economy is growing so that the argument that there are no jobs is incorrect. However, he said the need is to focus on skill development. Talking about the low non-performing assets of HDFC Bank, he called the bank a "very careful" organisation. The bank's 45 per cent of the lending is to corporates, while 30 per cent is to projects. "This has made the lender the fastest growing bank in the past five years," he said.
Edited by Manoj Sharma