Legal and Operational Challenges Highlighted

HDFC Bank MD & CEO Sashidhar Jagdishan recently addressed shareholders at the bank's annual general meeting, shedding light on the complexities surrounding reverse mortgage loans in India. Citing "various legal and operational issues," Jagdishan emphasized the product's unsuitability for both customers and financial institutions.

Understanding Reverse Mortgages

A reverse mortgage allows senior citizens to borrow against their home's value without selling it, providing a monthly income stream. The loan, plus interest, is repaid upon the sale of the house or the borrower's death. Despite being introduced in India under National Housing Bank guidelines, its adoption has been limited.

Technology and Innovation at HDFC Bank

Jagdishan also shared updates on the bank's technological advancements, including the rollout of a new mobile app and net banking interface. "The new mobile app is being deployed... the migration into the new mobile app will be completed for a lot of customers before the fiscal year is up," he stated. The bank is leveraging in-house teams for platform development, moving away from external vendors.

The Role of AI in Banking

The introduction of generative AI for process re-engineering and customer service was another highlight. However, Jagdishan clarified that AI would not replace human judgment but would initially support basic, routine tasks.

Growth and Challenges Ahead

Discussing the bank's post-merger growth and net interest margin trajectory, Jagdishan noted the trade-offs in deposit mobilization efforts, particularly the impact on low-cost current and savings account deposits.