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Oil dependence a key challenge for India: HDFC Bank director Keki Mistry

Mistry said that the trajectory of oil prices always needs to be watched as India imports 85 per cent of its oil requirements and is the world's third-largest oil importer

HDFC, HDFC Bank

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Ishita Ayan Dutt Kolkata

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The one key challenge India faces is its dependence on oil, HDFC Bank director Keki Mistry said. 

Mistry said that the trajectory of oil prices always needs to be watched as India imports 85 per cent of its oil requirements and is the world's third-largest oil importer. "Oil prices have a direct impact on both inflation, the current account deficit as well as the GDP." He said this while delivering the anniversary lecture on Bandhan Bank's foundation day.

Responding to a question on potential risks in India's journey during a fireside chat at the event, Mistry said the biggest risk for India is the risk of oil; climate is another risk.

On climate, he said that India has a large part of the economy coming from agriculture and rains all over the world had been erratic. "Nobody knows where the climate situation is going down the line. So that poses a risk because we have a young population."

The other factor that Mistry mentioned was the creation of jobs. "As we are a young country, we have so many people passing out from schools and colleges every year. It's therefore critical that we create jobs for these people." He added, "Fortunately we have been able to do that."

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"The biggest strength of the Indian economy is that it is a domestic consumption economy and we have so many young people in India," he said.

He also pointed out that the penetration levels - mortgages to GDP or credit card to GDP - were very low. Therefore, economic growth will always be there, particularly in the banking sector. 

In his speech, Mistry said that India's economic growth had surpassed expectations in recent years. "Both the government as well as the Reserve Bank of India did an excellent job in managing the economy in the last three years and particularly during the Covid period. This has contributed in a significant manner in making India the fastest growing economy in the world."

"I truly believe that there is no better place than to be in India right now," he said.

Mistry, who was the CEO and Vice Chairman of HDFC till its merger with HDFC Bank, said that the housing and real estate sector holds the key to unlocking the potential of the Indian economy. "Housing is one of the largest employment generators in the economy with linkages to nearly 300 industries both in terms of direct jobs and the jobs created in ancillary industries such as cement, steel, paint, power." Mistry

Bandhan Bank

On the occasion of foundation day, Chandra Shekhar Ghosh, Founder, managing director and chief executive officer, Bandhan Bank, said while it was a bank for all, Bandhan would continue to be committed to inclusive banking and reach those who do not get easy access to formal financial services.

In 2015, Bandhan became the first microfinance company to get a universal banking licence. "Eight years is not a long time. We have been able to achieve scale quickly but we are just getting started," Ghosh said.

The total bank business size was Rs 2 trillion, he said. "We are about to launch our co-lending business from today," he added.

Ghosh said that the bank would like to reach all states and union territories. "Every corner of the country where there is a need for financial services, we would like to knock on the door of every citizen."

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The bank just opened a branch in Leh. It has also opened a branch in Srinagar. With the launch of Leh and Srinagar, Bandhan is now present in 35 out of 36 states and union territories. "We are only not present in Lakshadweep," Ghosh said.

The bank opened 350 branches in the last two quarters. And this year, another 150 branches were likely to be opened.

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First Published: Aug 24 2023 | 9:47 AM IST

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