Fri May 02 04:20:00 UTC 2025: **HDFC Bank Cracks Down on Misuse of Short-Term Loans to Inflate Deposit Numbers**

**Mumbai, India** – India’s largest private sector lender, HDFC Bank, has launched a crackdown on the practice of artificially inflating deposit figures by temporarily using short-term loan facilities at the end of reporting quarters. Internal emails, including one circulated in late March, explicitly prohibit this practice, which involves leveraging cash credit and overdraft (CCOD) facilities to create temporary deposits in current and savings accounts (CASA) and term deposits (TD).

The bank’s internal communications highlight the identification of instances where CCOD loans were utilized to boost quarterly deposit numbers without legitimate business justification. While the practice involves transferring funds from CCOD facilities to customer accounts, creating a temporary increase in deposits, the funds are typically reversed shortly after the reporting period concludes. Although customers incur minimal interest charges, branch staff often attempt to offset these costs.

Sources within the bank indicate that disciplinary actions have been taken against some employees involved in this practice, while others are undergoing further sensitization training. Industry experts confirm that this manipulative tactic, while unethical, is not entirely uncommon within the banking sector. The close relationships between banks and business customers often make it difficult for businesses to refuse such requests.

While HDFC Bank declined to comment directly on the specifics of the disciplinary actions, a spokesperson stated that the bank regularly sends out guidelines and communications emphasizing the importance of maintaining ethical practices. The spokesperson stressed the bank’s continued commitment to the highest standards of ethics and professional integrity. The bank’s actions underscore a growing concern within the financial industry about the integrity of reported financial data and the importance of maintaining transparency.

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