The Morning Brief Corner Office Conversation with Amitabh Chaudhry, MD & CEO of Axis Bank
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Jul 1, 2025 Amitabh Chaudhry, MD & CEO of Axis Bank, discusses the challenges of transforming Axis into India's third-largest private sector bank since 2019. He candidly addresses slower growth compared to competitors like ICICI and HDFC Bank. The conversation dives into the impact of recent RBI policy changes on banking dynamics, examining interest rate fluctuations and their effects on depositors. Chaudhry also highlights India's resilient economic landscape and the ongoing transformation within the banking sector, focusing on strategic opportunities for growth amidst global uncertainties.
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Global Growth and India's Resilience
- Global economic growth is expected to be among the weakest since the recession, influenced by global tensions and policy uncertainties.
- India stands out with less impact, supported by durable liquidity and RBI's intent to balance regulations and economic growth.
Impact of RBI Rate Cut on Margins
- RBI's surprise 50 basis points rate cut will initially depress margins due to floating rate loans.
- Deposit rates are declining, which should help margins recover over 12-16 months as assets and liabilities reprice.
Challenges in Deposit Growth
- Deposit growth is constrained by liquidity, lack of credit growth, and government shifting balances to RBI.
- Deposits are more costly as more funds come from corporates or higher-cost sources compared to retail CASA.