Fri May 02 04:20:00 UTC 2025: **HDFC Bank Cracks Down on “Window Dressing” Deposit Practices**

**Mumbai, India** – India’s largest private sector lender, HDFC Bank, is taking a firm stance against the manipulation of deposit figures at the end of reporting quarters. The bank has issued multiple internal communications, most recently in late March, explicitly prohibiting the practice of artificially inflating deposits using its own loan facilities.

The emails, obtained by Mint, revealed that HDFC Bank discovered employees using cash credit and overdraft (CCOD) facilities to create temporary deposits in current and savings accounts (CASA/TD). This involved temporarily transferring funds from CCOD lines to customer accounts, boosting deposit numbers at quarter-end before reversing the transaction shortly after. While customers incurred minor interest charges, branch efforts reportedly minimized the impact.

Industry experts confirmed that this “window dressing” tactic, while not unique to HDFC Bank, is becoming less common. A senior consultant noted that business customers often comply due to their relationship with the bank, creating a temporary surge in deposits followed by a subsequent decline.

HDFC Bank, facing increased pressure on its credit-deposit ratio after merging with HDFC Ltd., has reportedly taken disciplinary action against some employees involved in the practice. The bank maintains its commitment to ethical and professional conduct, stating that internal communications about maintaining healthy practices are routine.

The practice is particularly relevant given the deposit crunch experienced across India’s banking sector last year. Analysts are increasingly relying on average deposit balances rather than quarter-end figures to assess a bank’s true financial health. The government’s altered disbursement methods for various schemes have also made it harder to secure current account deposits, crucial for banks’ profitability and a key metric for comparison between lenders.

While HDFC Bank’s current account deposits grew by a modest 1.3% year-on-year in March, compared to ICICI Bank’s 20.3% growth, the crackdown highlights the bank’s focus on transparency and adherence to regulatory standards. The move signals a shift towards a greater emphasis on sustainable deposit growth rather than artificial short-term boosts.

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