India’s largest private sector lender, HDFC Bank Limited, mobilised more than ₹1.5 trillion (₹1.5 lakh crore) in deposits during the second quarter of FY27 (July–September 2026), accelerating its liability-gathering drive to correct its post-merger credit-to-deposit (CD) ratio. According to provisional business volumes submitted to stock exchanges on Monday, October 5, 2026, the bank’s period-end deposits reached ₹33.28 trillion (₹33.28 lakh crore), marking an 18.8% year-on-year increase and outpacing gross loan growth.
Key takeaways
- Significant liability gathering: Period-end deposits grew 4.9% sequentially and 18.8% year-on-year to reach ₹33.28 lakh crore (₹33,275 billion) as of September 30, 2026, compared to ₹28.02 lakh crore a year earlier.
- Deposits outpace credit growth: Total deposit expansion (18.8% YoY) comfortably outstripped gross advances growth of 16.3% YoY (reaching ₹32.20 lakh crore), reflecting deliberate balance-sheet rebalancing to lower the lender’s loan-to-deposit ratio (LDR).
- FCNR(B) swap windfall: The bank mobilised $11.5 billion (~₹1.10 trillion) in foreign currency non-resident deposits under the Reserve Bank of India’s (RBI) special swap window, deploying $5.7 billion via overseas branch loans.
- Skew toward time deposits: Term deposits surged 22.8% YoY to ₹22.76 lakh crore, while low-cost Current Account and Savings Account (CASA) deposits grew at a slower 10.8% YoY to ₹10.52 lakh crore.
- Leadership transition clarity: The provisional business update coincided with the clearance of Anup Bagchi as the bank’s incoming Managing Director & CEO, effective October 27, 2026, resolving executive succession uncertainty.
Balance-sheet rebalancing: Deposits outstrip loan growth
Following its mega-merger with parent mortgage originator Housing Development Finance Corporation (HDFC Ltd) in mid-2023, HDFC Bank inherited a large loan portfolio without a proportional base of low-cost retail branch deposits. This structural mismatch pushed its credit-to-deposit ratio past 110%, prompting the RBI to urge commercial lenders to bring credit expansion in line with sustainable retail funding.
The Q2FY27 provisional numbers demonstrate progress in that rebalancing strategy:
HDFC BANK Q2FY27 GROWTH METRICS (PROVISIONAL)
Gross Advances Growth (YoY):
[█████████████████████████████████] 16.3% (To ₹32.20 Lakh Crore)
Total Deposits Growth (YoY):
[██████████████████████████████████████] 18.8% (To ₹33.28 Lakh Crore)
└─► Deposit Pace Outstrips Credit by 250 bps
By growing deposits at 18.8% while moderating loan book expansion to 16.3%, the bank’s loan-to-deposit ratio has moderated toward 97%, down from peak post-merger levels above 110%. Total advances under management (AUM) stood at ₹33.08 lakh crore as of September 30, 2026, expanding 15.3% year-on-year.
| Balance Sheet Metric | September 30, 2025 (Q2FY26) | September 30, 2026 (Q2FY27) | YoY Expansion (%) | Sequential Growth (QoQ) |
| Total Period-End Deposits | ₹28,018 Billion (~₹28.02T) | ₹33,275 Billion (~₹33.28T) | +18.8% | +4.9% |
| Gross Advances | ₹27,692 Billion (~₹27.69T) | ₹32,195 Billion (~₹32.20T) | +16.3% | +2.3% |
| Period-End CASA Deposits | ₹9,492 Billion (~₹9.49T) | ₹10,520 Billion (~₹10.52T) | +10.8% | +3.4% |
| Period-End Time Deposits | ₹18,526 Billion (~₹18.53T) | ₹22,755 Billion (~₹22.76T) | +22.8% | +5.6% |
| Average CASA Deposits (Quarter) | ₹8,770 Billion | ₹9,712 Billion | +10.7% | — |
| Average Time Deposits (Quarter) | ₹18,335 Billion | ₹21,952 Billion | +19.7% | — |
Source: Compiled from HDFC Bank statutory provisional exchange filings under SEBI LODR Regulations.
The FCNR(B) catalyst: $11.5 billion mobilized via the RBI swap window
A notable contributor to HDFC Bank’s deposit surge was its utilization of the Reserve Bank of India’s foreign-currency liquidity framework.
To shore up foreign-exchange reserves and defend against rupee volatility, the RBI introduced a special concessional swap facility for Foreign Currency Non-Resident [FCNR(B)] deposits in June 2026, which remained active through August 31. Under the scheme, banks received concessional forward swap rates when mobilising foreign currency deposits from Non-Resident Indians (NRIs) and converting them into domestic or overseas lending pools.
HDFC Bank emerged as the primary institutional beneficiary of the facility:
- Deposit Mobilisation: Mobilised $11.5 billion (approximately ₹1.10 trillion / ₹1.10 lakh crore) in foreign-currency deposits under the window.
- Overseas Lending Deployment: Extended loan facilities worth $5.7 billion (₹54,770 crore) through its offshore branches against these deposits.
- Bank Credit Lines: Issued standby letters of credit (SBLCs) totaling $3.1 billion (₹29,340 crore) to other financial institutions against these funds.
The FCNR(B) influx accounted for approximately 3.3% of the bank’s total deposit base and provided over two-thirds of the net ₹1.5 trillion gathered during the quarter, giving the lender low-friction institutional funding during a competitive domestic deposit market.
THE FCNR(B) DEPLOYMENT PIPELINE ($11.5 BILLION TOTAL):
[ NRI Foreign Currency Deposits Mobilised under RBI Concessional Swap: $11.5B ]
│
┌───────────────────────────┴───────────────────────────┐
▼ ▼
[ Overseas Branch Lending: $5.7B ] [ Standby Letters of Credit (SBLCs): $3.1B ]
(Deployed in offshore credit assets) (Secured against inter-bank facilities)
CASA vs. time deposits: Cost-of-funds considerations
While the headline deposit number showed robust expansion, the internal composition of that growth highlights an ongoing margin challenge across the Indian banking sector.
Term (fixed) deposits grew more than twice as fast as low-cost Current Account and Savings Account (CASA) balances:
- Time Deposits: Expanded by 22.8% YoY to reach ₹22.76 lakh crore.
- CASA Deposits: Rose by a modest 10.8% YoY to ₹10.52 lakh crore.
As a result, the bank’s period-end CASA ratio—the proportion of interest-free current accounts and low-interest savings balances relative to total deposits—slipped to roughly 31.6%, down from approximately 33.9% in the prior year.
DEPOSIT COMPOSITION DRIFT (Q2FY26 VS. Q2FY27):
Q2FY26 Period-End:
Time Deposits: [█████████████████████████████████] 66.1%
CASA Deposits: [█████████████████] 33.9%
Q2FY27 Period-End:
Time Deposits: [████████████████████████████████████] 68.4%
CASA Deposits: [████████████████] 31.6%
With retail savers actively moving idle savings balances into higher-yielding 1-to-3-year fixed deposits, equity mutual funds, and SIPs, commercial banks have had to compete on rates to retain domestic capital. The growing share of term deposits at rates between 7.0% and 7.5% means that HDFC Bank’s blended cost of funds remained elevated through Q2, which could limit near-term Net Interest Margin (NIM) expansion.
Strategic backdrop: Anup Bagchi cleared as next MD & CEO
The release of the Q2 business figures coincided with a major leadership milestone. The Reserve Bank of India granted formal regulatory clearance for the appointment of Anup Bagchi as HDFC Bank’s next Managing Director and Chief Executive Officer, succeeding outgoing chief Sashidhar Jagdishan on October 27, 2026.
Bagchi, a seasoned financial services veteran with more than three decades of executive experience across retail banking, capital markets, wealth management, and insurance within the ICICI Group (formerly heading ICICI Prudential Life Insurance and serving on the ICICI Bank board), takes charge at an operational juncture:
- Completing Post-Merger Assimilation: Finalizing the integration of HDFC Ltd’s mortgage customer base and cross-selling consumer loans, credit cards, and wealth products.
- Deposit Network Expansion: Managing the bank’s network of over 8,800 domestic branches to lower the blended cost of funds by reigniting retail CASA accretion.
- Digital Architecture Overhauls: Upgrading mobile platforms and core banking infrastructure following prior regulatory technical audits.
The regulatory clearance of Bagchi’s appointment removes succession uncertainty, providing operational clarity as the bank enters the second half of FY27.
What to watch next
- Audited Q2FY27 financial results: Equity analysts will examine the bank’s full quarterly earnings statement later in October, focusing on Net Interest Margins (NIM), which hovered around 3.45% to 3.50% in recent quarters.
- Asset quality and slippages: Scrutiny will center on gross and net non-performing asset (NPA) ratios across unsecured personal loans and credit cards, following regulatory alerts regarding stress in small-ticket retail lending.
- CEO transition on October 27: Market participants will look for initial strategy commentary from incoming CEO Anup Bagchi regarding branch expansion plans, mortgage distribution, and medium-term loan-growth targets.
Frequently asked questions
How much in deposits did HDFC Bank gather during Q2FY27?
HDFC Bank mobilised more than ₹1.5 trillion (over ₹1.5 lakh crore) in deposits in the July–September quarter of FY27, taking its total period-end deposits to approximately ₹33.28 lakh crore (up 18.8% year-on-year).
Why is deposit growth outpacing loan growth important for HDFC Bank?
Following its merger with HDFC Ltd in 2023, the bank inherited large mortgage assets without equivalent retail deposits, pushing its credit-to-deposit ratio above 110%. Growing deposits (18.8%) faster than loans (16.3%) helps normalize the loan-to-deposit ratio back toward 97%, improving liquidity and meeting regulatory preferences.
What role did the RBI’s FCNR(B) swap window play in the deposit surge?
The bank raised $11.5 billion (~₹1.10 trillion) in Foreign Currency Non-Resident deposits under the RBI’s special concessional swap facility. This provided low-friction institutional funding, with $5.7 billion deployed as overseas branch loans and $3.1 billion issued as standby letters of credit.
Who is the new CEO of HDFC Bank?
The Reserve Bank of India has approved the appointment of Anup Bagchi as the next Managing Director and CEO of HDFC Bank. Bagchi, a former senior executive with the ICICI Group, assumes office on October 27, 2026.
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