HDFC Bank

By Dharamraj Dhutia

MUMBAI, July 3 (Reuters) - India's ICICI Bank ICBK.NS plans its first dollar bond sale in nearly nine years, joining peers HDFC Bank and Axis Bank in leveraging the central bank's lower-cost hedging facility for foreign-currency issuance, two bankers said on Friday.

The lender is expected to raise at least $500 million through a likely five-year bond issue, according to the bankers familiar with the matter.

However, the issuance is unlikely before the second half of August, as ICICI Bank is awaiting its quarterly financial results later this month and must complete the renewal of its Global Medium Term Note programme, the bankers said.

"There are plans to tap the dollar bond market, but it may take 45-60 days for the actual issuance to happen as a lot of procedures are still pending," one of the bankers said.

The bankers requested anonymity as they are not authorised to speak to media. ICICI Bank did not immediately respond to a Reuters request for comment.

If completed, the transaction would mark ICICI Bank's first dollar bond issuance since December 2017, when it raised $500 million through 10-year bonds at a coupon of 3.80%.

The fundraising comes after the Reserve Bank of India in June introduced a swap facility allowing eligible external commercial borrowings by banks and state-owned companies to be hedged at a fixed rate of 1.5% per annum, compounded semi-annually.

The measure significantly lowers hedging costs, making overseas dollar fundraising more attractive.

HDFC Bank HDBK.NS became the first lender to use the new facility, raising $750 million through five-year bonds in June. Axis Bank AXBK.NS followed with an $800 million dual-tranche dollar bond issue.

(Reporting by Dharamraj Dhutia; Editing by Sherry Jacob-Phillips)

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MUMBAI, July 1 (Reuters) - India's HDB Financial Services HDBF.NS has accepted bids worth 11.50 billion rupees ($121.00 million), for bonds maturing in two years and 11 months, three bankers said on Wednesday.

It will pay a coupon of 7.90% and had invited commitment bids for the issue earlier in the day, they said.

The company did not immediately respond to a Reuters email seeking comment.

Here is the list of deals reported so far on July 1:

* Size includes base plus greenshoe for some issues

($1 = 95.0450 Indian rupees)

(Reporting by Dharamraj Dhutia; Editing by Nivedita Bhattacharjee)

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MUMBAI, June 30 (Reuters) - India's HDB Financial Services HDBF.NS plans to raise 14.5 billion rupees ($153.18 million), including a greenshoe option of 9.5 billion rupees, through a sale of bonds maturing in two years and 11 months, three bankers said on Tuesday.

It will pay a coupon of 7.90% and has invited commitment bids for the issue on Wednesday, they said.

The company did not immediately respond to a Reuters email seeking comment.

Here is the list of deals reported so far on June 30:

*Size includes base plus greenshoe for some issues

($1 = 94.6625 Indian rupees)

(Reporting by Dharamraj Dhutia and Khushi Malhotra; Editing by Ronojoy Mazumdar)

(([email protected], [email protected]))

** HDFC Bank HDBK.NS said on Friday a legal review found no evidence to support concerns raised by former Chairman Atanu Chakraborty who resigned in March citing ethical differences with India's largest private lender

** Shares rise as much as 1.2% on Monday, last marginally up 0.1% at 797.10 rupees

** Macquarie ("Outperform"; PT:1,150 rupees) says with the favourable legal review and RBI's earlier finding of no material concerns clear the path for CEO and MD Sashidhar Jagdishan's three-year extension

** Brokerage Macquarie sees HDFC Bank capturing significant share of foreign currency inflows as governance concerns ease and RBI incentivises FCNR deposits

** Jefferies ("Buy"; PT: 1,050 rupees) says legal review findings ease investor concerns, especially because as the bank has underperformed compared to its peers since Chakraborty resigned

** On average, HDFC stock is rated "Strong Buy" by 38 analysts; median PT 1,050 rupees - data compiled by LSEG

** YTD, stock down 19.6%

(Reporting by Mridula Kumar in Bengaluru)

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Updates Friday story with Saturday comment from former chairman in paragraphs 7-8, 13, context in paragraph 3, bullet points

June 26 (Reuters) - HDFC Bank HDBK.NS said on Friday a legal review found no evidence to support concerns raised by former Chairman Atanu Chakraborty when he resigned in March citing ethical differences with India's largest private lender.

U.S.-listed shares of HDFC Bank HDB.N rose 1.7%.

Chakraborty's sudden exit had wiped out nearly 14% of the bank's market value, about $16 billion, in the following weeks. He cited "incongruence" between his personal values and bank practices for his resignation but has not elaborated.

His departure prompted India's central bank to issue a rare statement reassuring investors and depositors over the health of the systemic lender.

Law firms Wilson Sonsini and Wadia Ghandy conducted the legal review of the matter that has exposed leadership strain at the bank. Largely owned by foreign institutional investors, HDFC Bank has also faced ire over a stock that has struggled since a $40 billion merger with parent HDFC Ltd in 2023.

"Having now completed an extensive legal review, External Law Firms found that Mr. Chakraborty's statement and its implications were not substantiated by the record and witness interviews," the law firms said in a report published to stock exchanges by HDFC Bank late on Friday.

On Saturday, Chakraborty said he had not engaged with the law firms because they did not provide him with details of their investigation.

"I was open to engaging with the foreign firm since it appeared fairly independent, but without the (terms of reference), I chose not to engage," he told Reuters, describing the appointment of law firms as largely a compliance check.

Reuters reported exclusively last month that the law firms have not found any material deficiencies in governance or board processes.

The three-month review found no evidence from board committee minutes or witness interviews that Chakraborty raised concerns that "happenings and practices" at the bank were not aligned with his personal "values and ethics", the law firms said on Friday.

There was also no evidence that he disagreed with board decisions regarding the "Dubai matter", the law firms said, referring to a statement Chakraborty made to CNBC-TV18 that HDFC Bank had delayed taking action against officials involved in mis-selling Additional Tier-1 bonds to investors in Dubai.

The bank and the external law firms "repeatedly" asked Chakraborty to speak with the law firms as part of the review, but the interview did not take place, the report said.

Chakraborty responded to Reuters, "They carried out their review and concluded that the board was functioning well — of course, that was under me."

The conclusion of the probe allows HDFC Bank to proceed with its application to the Reserve Bank of India to reappoint CEO Sashidhar Jagdishan, whose three-year term expires in October.

That application, which had been due by the end of May, had been delayed pending the outcome of the review. The central bank must approve all top appointments at Indian lenders.

(Reporting by Jayshree P Upadhyay in Mumbai, Devika Nair and Shivani Tanna in Bengaluru, Chris Thomas in Mexico City, Gopika Gopakumar in Mumbai, Writing by Rishika Sadam; Editing by Maju Samuel and William Mallard)

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June 26 (Reuters) - HDFC Bank Ltd HDBK.NS:

• HDFC BANK - ANNOUNCES CONCLUSION OF LEGAL REVIEW

• HDFC BANK - EXTERNAL LAW FIRMS SUBMIT LEGAL REVIEW REPORT TO HDFC BANK BOARD

• HDFC BANK - LEGAL REVIEW FINDS MR. CHAKRABORTY'S STATEMENT NOT SUBSTANTIATED

• HDFC BANK - NO SUPPORT FOR MR. CHAKRABORTY'S STATEMENT FOUND IN BOARD OR COMMITTEE MINUTES

• HDFC BANK - WITNESS INTERVIEWS DID NOT SUBSTANTIATE MR. CHAKRABORTY'S STATEMENT

• HDFC BANK - NO EVIDENCE MR. CHAKRABORTY RAISED CONCERNS OR DISAGREED WITH BOARD ON DUBAI MATTER

• HDFC BANK - NO CONTEMPORANEOUS EVIDENCE WAS IDENTIFIED REFLECTING THAT HE RAISED ANY CONCERNS ABOUT HIS PERSONAL VALUES AND ETHICS

Source text: ID:nNSE9TXyX1

Further company coverage: HDBK.NS

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By Dharamraj Dhutia and Khushi Malhotra

MUMBAI, June 25 (Reuters) - Three Indian development finance institutions are planning to raise at least $1.5 billion through foreign-currency bank loans under the central bank's discounted overseas borrowing facility, three people familiar with the plans said.

The institutions are favouring loans over bonds because none has issued dollar debt before and the process is simpler, the sources added.

The National Bank for Agriculture and Rural Development (NABARD), the Small Industries Development Bank of India (SIDBI) and the National Bank for Financing Infrastructure and Development (NaBFID) are each seeking to raise at least $500 million through foreign-currency loans, with NaBFID the furthest along after initiating talks with lenders, an executive confirmed.

"We expect to raise up to $2 billion via ECBs in this financial year. At present, we are planning to raise $500 million through the ECB route, and we have already started our activity and are exploring in the market," NaBFID managing director Rajkiran Rai told Reuters.

"With the RBI window opening, ECBs work out much cheaper. For the loan, the landed cost could be in the range of 6.5%-7.0%, NaBFID's Rai added.

The institution had also raised $125 million via a smaller dollar loan tranche in March, the sources added.

The sources declined to be identified as they are not authorised to speak to the media. NABARD and SIDBI did not respond to Reuters' requests for comment.

NABARD and SIDBI, which have not yet tapped foreign funding, have initiated preliminary talks and could approach the market over the next 30 to 40 days, according to all the sources.

"There is a lengthy procedure involved in a debut dollar bond sale, and it is time-consuming. If an institution is not going to be a regular issuer like EXIM Bank, it makes little sense to choose bonds over loans," one of the sources said.

Based on the credit ratings, dollar loans may be just marginally expensive than bonds for now.

The Reserve Bank of India earlier this month allowed banks and state-run companies raising funds overseas to access a subsidised hedging facility, lowering the cost of managing currency risk as part of a broader effort to attract dollar inflows and support the rupee.

Since then, HDFC Bank HDBK.NS, Axis Bank AXBK.NS and Power Finance Corp PWFC.NS have raised a combined $1.85 billion through dollar bonds, while Bank of Baroda BOB.NS and State Bank of India SBI.NS are preparing for similar issues.

(Reporting by Dharamraj Dhutia and Khushi Malhotra; Editing by Nivedita Bhattacharjee)

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By Dharamraj Dhutia

MUMBAI, June 23 (Reuters) - India's state-run Power Finance Corp PWFC.NS has accepted bids worth $300 million for a five-year dollar bond issue, becoming the first non-bank lender to tap the central bank's subsidised hedging facility for overseas borrowings, three bankers said.

The bonds were priced at a spread of 105 basis points over U.S. Treasuries, giving a yield of 5.327%, well inside the initial guidance of 130 basis points, indicating strong investor demand.

"The company chose to accept a lower quantum as this was their first tranche, but they could explore this route again when treasury yields ease," one of the bankers said on Tuesday.

Earlier, PFC had told bankers that it intended to raise $500 million, but ultimately settled for a smaller amount, as bankers said the spread would have widened had it pursued the full quantum.

The bankers requested anonymity as they are not authorised to speak to media, while PFC did not reply to a Reuters email seeking comment.

This comes after India's top private lender, HDFC Bank HDBK.NS sold $750 million of five-year dollar bonds last week at a spread of about 90 basis points over U.S. Treasuries.

Earlier this month, the RBI said external commercial borrowings by banks and state-run companies would qualify for a subsidised hedging facility, helping cut the cost of managing currency risk.

The step forms part of a wider RBI push to draw in dollar inflows and bolster the rupee.

Lenders Bank of Baroda and Axis Bank have finalised bankers for their planned dollar bond sales, and may set the pricing on them before the end of the week.

(Reporting by Dharamraj Dhutia; Editing by Nivedita Bhattacharjee)

(([email protected];))

** India's stock benchmarks Nifty 50 .NSEI and Sensex .BSESN fall 0.9% and 1%, on course to snap a five-session winning run, dragged by IT stocks after Accenture's weak demand commentary

** Twelve of the 16 major sectors log losses; the broader small-caps .NIFSMCP100 rise 0.3%, mid-caps .NIFMDCP100 drop 0.2%

** IT index .NIFTYIT falls 5.2%, slides to a three-year low after Accenture reports a drop in bookings and flags weakness driven by delayed decisions due to the Mideast conflict

** "Accenture's commentary leads to risks of a potential weak Q2, implying risks to financial year 2027 earnings overall for Indian IT companies," says Investec

** Top private lender HDFC Bank HDBK.NS falls 2.7%; the Reserve Bank of India approved a three-month extension for interim chairman Keki Mistry, or until a new Chairman is appointed

** Heavyweight Reliance Industries RELI.NS trades flat ahead of its annual general meeting later in the day

** Despite the session's losses, benchmarks Nifty and Sensex are up 1.4% and 1.5%, respectively, for the week, aided by a drop in crude prices LCOc1 to $80 a barrel on the preliminary U.S.-Iran peace deal

(Reporting by Bharath Rajeswaran in Bengaluru)

(([email protected]; +91 9769003463;))

By Dharamraj Dhutia

MUMBAI, June 17 (Reuters) - India's largest private lender, HDFC Bank HDBK.NS, has accepted bids worth $750 million for its planned dollar bonds, capitalising on the central bank's subsidised hedging window for overseas borrowings, three merchant bankers said on Wednesday.

The deal is the largest by an Indian lender since the State Bank of India's SBI.NS $750 million five-year bond sale in May 2023 and comes as SBI and Bank of Baroda BOB.NS line up similar overseas debt sales.

HDFC Bank priced its 5-year bond issue at 90 basis points over U.S. Treasuries, translating to a yield of 5.0670%.

After launching with guidance at 120 basis points over Treasuries, robust investor demand compressed the spread, bankers said.

The sources could not be named as they are not authorised to speak to the media. HDFC Bank did not reply to a Reuters email seeking comment.

Earlier this month, the RBI said external commercial borrowings by banks and state-run companies would qualify for a subsidised hedging facility, helping cut the cost of managing currency risk.

The step forms part of a wider RBI push to draw in dollar inflows and bolster the rupee.

"Considering the hedging discount, the all-in landed cost of funds for the bank should be around 7%," one of the bankers said.

Merchant bankers expect inflows of around $15 billion to $20 billion through the ECB route over the next six months.

Proceeds of the bond issue will be used to support overseas branches and subsidiaries, fund growth in offshore businesses and for general corporate purposes, bankers said, citing a term sheet.

The lender also has a call option due in August for a perpetual bond it had sold five years ago.

(Reporting by Dharamraj Dhutia; Editing by Nivedita Bhattacharjee)

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By Dharamraj Dhutia

MUMBAI, June 16 (Reuters) - India's largest private lender, HDFC Bank HDBK.NS, is looking to raise at least $500 million via dollar bonds this week, tapping the central bank's subsidised hedging window for overseas borrowings, three sources directly aware of the matter said on Tuesday.

The private bank's issue comes after Reuters reported that state-run lenders State Bank of India SBI.NS and Bank of Baroda BOB.NS were also in talks to raise dollars this way.

HDFC Bank's plans include a five-year bond issue, with an initial price guidance of 5-year U.S. Treasury yield plus 120 basis points, the sources said.

"The final cutoff should come below 100 bps over U.S. Treasury yields, as strong demand is expected in the book-building process," said one of the sources, adding the bank could decide to raise more than $500 million depending on demand.

The sources requested anonymity, as they are not authorised to speak to the media, while HDFC Bank did not reply to a Reuters query seeking comment.

Earlier this month, the Reserve Bank of India said that external commercial borrowings with an average maturity of at least three years by state-run companies and banks would qualify for a swap facility at a fixed rate of 1.5% per annum, compounded semi-annually.

The facility lowers hedging costs and helps cushion a fall in the rupee.

Merchant bankers expect inflows of around $15 billion to $20 billion through this route over the next six months.

The proceeds from HDFC Bank's bond issue will be used to meet the funding requirements of the bank's foreign branches and foreign subsidiaries, develop and expand business in the foreign offices and meet the bank's general corporate purposes, the sources said, citing a term sheet.

(Reporting by Dharamraj Dhutia; Editing by Harikrishnan Nair)

(([email protected];))

** Shares of India's HDFC Bank HDBK.NS rise 2.05% to 788.30 rupees

** Nomura ("buy" TP:950 rupees) says the lender could be a key beneficiary of the RBI's FCNR(B) deposit scheme, which allows banks to raise foreign-currency deposits from non-resident Indians

** Brokerage estimates co could garner about 15% of overall foreign currency non-resident (FCNR) account flows, equivalent to roughly 3% of its current deposit base, helping FY27 deposit growth improve to 17.7% from 15%

** Says the scheme could help ease concerns around HDFC Bank's credit-deposit ratio, liquidity coverage and funding costs

** YTD stock down 20.52%

(Reporting by Surbhi Misra in Bengaluru)

(([email protected] | X: https://twitter.com/SurbhiMisra_ |;))

Added details about SBI's rate hike

By Gopika Gopakumar

MUMBAI, June 10 (Reuters) - Some banks raised rates on foreign currency deposits for non-resident Indians by as much as 300 basis points on Wednesday, in a likely bid to attract dollar inflows after the central bank eased regulatory restrictions last week.

The Reserve Bank of India will bear the ‌full hedging cost for three- to five-year non-resident deposits, it said on Friday, as part of a broader set of measures to encourage overseas flows and curb weakness in the rupee.

The unit is Asia's second-worst-performing currency this year, down 6% so far, and slipping to record lows in May.

HDFC Bank HDBK.NS, India's largest private sector lender, hiked rates by 235-265 basis points to 6% on three- to five-year deposits.

State Bank of India, the country's largest bank, raised rates by as much as 300 basis points across three- to five- year deposits. For deposits up to $1 million, it will now offer between 5.25% to 5.75% on of three- to five-year tenures. For deposits above $1 million, the bank will offer between 5.5% and 6% on tenures of three to five years.

AU Small Finance Bank AUFI.NS increased rates by 195 bps, offering 7.1% on three-year deposits and 7% on five-year deposits.

Yes Bank YESB.NS has set the rate at 7% on three-year deposits, 7.05% on four-year deposits and 7.10% on five-year deposits, according to a Bloomberg report on Wednesday. A Yes Bank spokesperson did not respond to Reuters' request for comment.

Other banks are expected to announce their new rates this week.

Lenders could raise as much as $35 billion to $40 billion via these foreign currency deposits until September this year, according to a Reuters report. The RBI said it is also open to banks providing guarantees to offshore lenders to lend to NRIs, who can place these borrowed funds as deposits.

The RBI had last launched a concessional forex swap facility for non-resident Indians in 2013 when the ​rupee ⁠had depreciated sharply due to the U.S. Federal Reserve's "taper tantrum". Under that scheme, HDFC Bank mobilised $3.4 billion, followed by ICICI Bank ICBK.NS, SBI SBI.NS and select foreign banks.

(Reporting by Gopika Gopakumar in Mumbai; Editing by Sonia Cheema and Diti Pujara)

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MUMBAI, June 2 (Reuters) - India's Credila Financial Services HDFR.NS plans to raise up to 5.5 billion rupees ($57.75 million), including a greenshoe option of 3.5 billion rupees, through a sale of bonds maturing in five years, three bankers said on Tuesday.

It has invited coupon and commitment bids for the issue on Wednesday, they said.

The company did not immediately respond to a Reuters email seeking comment.

Here is the list of deals reported so far on June 2:

*Size includes base plus greenshoe for some issues

($1 = 95.2325 Indian rupees)

(Reporting by Dharamraj Dhutia and Khushi Malhotra; Editing by Sonia Cheema)

(([email protected], [email protected]))

Updates to add bank statement; latest stock price

MUMBAI, May 27 (Reuters) - Shares of India's top private lender HDFC Bank HDBK.NS fell as much as 2.5% on Wednesday after local media reported that the lender made illegal payments to a state government department to attract deposits.

The Indian Express newspaper reported, citing sources and documents, that HDFC Bank paid 450 million rupees ($4.7 million) to the road development corporation of the western state of Maharashtra to draw large deposits. Regulations do not allow lenders to pay varied interest rates to depositors.

HDFC Bank disguised the additional payments as marketing spends to incentivise the department to make the deposits, the report said, adding that CEO Sashidhar Jagdishan was aware of these payments.

Reuters could not independently verify the report.

An HDFC Bank spokesperson told Reuters the lender has robust internal oversight, audit and control processes and systems.

"All issues are dealt with in accordance with established norms, and full process is always followed before final determination post any internal review."

"We strongly reject any assumptions of wrongdoing or culpability based on selective material," the spokesperson said.

Shares of HDFC Bank were trading down 2.5% at 759.50 rupees by 1:20 p.m. IST in Mumbai while the benchmark BSE Sensex .BSESN was marginally lower.

The shares have fallen 9.5% since March 19, when Atanu Chakraborty abruptly resigned as the lender's part-time chairman, raising questions about governance practices.

While Chakraborty had not made specific allegations, he had said that practices at the bank were not in line with his "personal" values and ethics.

Legal firms appointed by HDFC Bank to review the claims have yet to find material lapses in processes followed by the bank, Reuters reported earlier this month.

The outcome of the legal review is awaited.

HDFC Bank has also yet to submit an application for the central bank to reappoint CEO Jagdishan, whose three-year term ends in October.

($1 = 95.7600 Indian rupees)

(Reporting by Ira Dugal; additional reporting by Vivek Kumar M in Mumbai; Editing by Mrigank Dhaniwala)

(([email protected]; +91-9833024892;))

MUMBAI, May 14 (Reuters) - India's HDB Financial Services HDBF.NS plans to raise up to 16.75 billion rupees ($175 million), including a greenshoe option of 13.75 billion rupees, through the sale of bonds maturing in three years, three bankers said on Thursday.

It will pay a floating-rate coupon, with an initial rate at 7.3517%, and subsequent rates will be based on a three-month t-bill rate with a spread of 205 basis points, they said, adding the company has invited commitment bids on Friday.

HDB Financial did not immediately respond to a Reuters email seeking comment.

Here is the list of deals reported so far on May 14:

*Size includes base plus greenshoe for some issues

($1 = 95.7300 Indian rupees)

(Reporting by Dharamraj Dhutia and Khushi Malhotra; Editing by Eileen Soreng)

(([email protected]))

By Gopika Gopakumar and Jayshree P Upadhyay

MUMBAI, May 6 (Reuters) - Law firms reviewing governance at HDFC Bank HDBK.NS are set to report this month that they have not found any major lapses, two people with direct knowledge of the findings said, clearing the way for the reappointment of its CEO.

India's largest private lender by assets called in Mumbai-based Trilegal and Wadia Ghandy & Co after Atanu Chakraborty resigned as chairman in March citing "incongruence" between his personal values and bank practices. He did not elaborate.

The resignation was followed by a 13.81% drop in the bank's share price, or $16 billion in the stock's value, and prompted a rare statement from the central bank seeking to allay investor and depositor concern about a lender deemed too big to fail.

It also threw into doubt the lender's application at the central bank due May-end to reappoint CEO Sashidhar Jagdishan.

The affair exposed leadership strain at HDFC, a bank majority-owned by foreign institutional investors and which has faced ire over stock that is down 5% since a $40 billion merger with parent HDFC Ltd in 2023. Closest rival ICICI Bank ICBK.NS has risen 33% in that time and the benchmark Nifty 50 is up 24%.

With 120 million customers and just over a tenth of banking deposits, a clean bill of health from the law firms would bring certainty to a bank whose stability is critical to the economy.

The law firms examined minutes and video recordings of board and extraordinary general meetings over the last three years to ascertain whether Chakraborty had raised governance issues and, if so, how those issues were addressed, the people said, declining to be identified as the findings are not public.

All issues raised at board level were handled as per prescribed processes, one of the people said, without elaborating on those issues.

The law firms are likely to hand their report this month to the board, which will then submit it to the central bank, the person said.

The review findings have not been previously reported.

Chakraborty declined to comment on Reuters' texted queries. HDFC Bank, the Reserve Bank of India, Trilegal and Wadia Ghandy & Co did not respond to emailed requests for comment.

BANK SET TO PROPOSE CEO REAPPOINTMENT

The resignation and review had delayed a board decision on whether to recommend Jagdishan for reappointment as CEO after his three-year term ends in October. The central bank approves lenders' CEO appointments.

HDFC Bank will propose Jagdishan for reappointment after the law firms submit their report, the second person said.

The central bank is of the view that there are no issues that could preclude reappointment, said a third person, who is familiar with RBI thinking. If the review tallies, the RBI would have no problem supporting reappointment, the person said.

After Chakraborty resigned, the central bank said that, on the basis of its periodical assessment, "there are no material concerns on record as regards its conduct or governance".

Proxy advisor InGovern Research Advisory Services last month said the resignation was likely driven by individual personality rather than any threat to shareholder value.

(Reporting by Gopika Gopakumar and Jayshree P Upadhyay in Mumbai; Editing by Ira Dugal and Christopher Cushing)

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By Dharamraj Dhutia

MUMBAI, May 5 (Reuters) - Currency in circulation in India surged by over 610 billion rupees ($6.40 billion) in the first 15 days of April, pushing the total to a record 42.3 trillion rupees, and a sustained pattern could impact liquidity, economists said.

The spike, up 11.8% on-year and the highest since early 2017 after demonetisation, extends a rise in cash demand seen over the past six months and through the last financial year, central bank data showed.

Currency demand had been "somewhat subdued" relative to GDP growth in recent years, setting the stage for a sharper rebound, helped by strong rural demand, said Abhishek Upadhyay, co-head of research at ICICI Securities Primary Dealership.

A cut in the goods and services tax on several daily-use items in September also boosted demand.

Lower interest rates have further supported cash usage, particularly in rural areas with a higher propensity to spend, said Soumya Kanti Ghosh, group chief economic adviser at State Bank of India.

He added that higher prices of precious metals may have also lifted currency in circulation through recycling of gold and silver from households.

The surge, if it persists, could pose a challenge for surplus liquidity in the banking system, which the central bank has tried to maintain to support economic activity.

HDFC Bank expects the liquidity surplus to average around 1% of deposits in the first half of the current financial year, before easing to 0.5% in second half.

"But if CIC continues to remain elevated due to rise in inflation, further acceleration in rural demand, and any impact from state elections, liquidity balances could move towards the lower band of the forecast range," economist Sakshi Gupta said.

The RBI said in March that holding the surplus within a range of 0.6%-1.1% of deposits helps in keeping the spread between weighted average call rate and policy rate narrow.

RBI's infusions have kept banking liquidity in surplus but going forward, while RBI dividend will support it, CIC will drain it further, said Dhiraj Nim, an economist and FX strategist at ANZ.

($1 = 95.2725 Indian rupees)

(Reporting by Dharamraj Dhutia; Editing by Nivedita Bhattacharjee)

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Mumbai, May 2 (Reuters) - India's Kotak Mahindra Bank KTKM.NS reported a jump in fourth-quarter profit that beat estimates on Saturday, supported by strong loan growth and lower provisions for potential bad loans.

The country's third-largest private lender's standalone net profit rose 13% to 40.27 billion rupees for the quarter ended March 31 from last year. Analysts had expected a profit of 37.37 billion rupees, according to data compiled by LSEG.

Loan demand in India gained momentum in the second half of the fiscal year ended in March ​as easing inflation and lower taxes supported household spending and corporate borrowing.

The lender's net advances expanded 16% in the quarter from a year earlier, mainly driven by retail and corporate loans. Total deposits rose by 15%.

Last month, larger peers HDFC Bank HDBK.NS and ICICI Bank ICBK.NS beat profit views aided by strong loan growth.

Net interest income – the difference between interest earned on loans and interest paid on deposits - rose 8% ​to 78.76 billion rupees.

Provisions and contingencies fell 36% quarter-on-quarter and 43% year-on-year to 5.16 billion rupees.

The lender's gross non-performing asset ratio fell to 1.2% at the end of March, from 1.42% in the year-ago quarter.

(Reporting by Ashwin Manikandan, Jayshree P Upadhyay in Mumbai and Nishit Navin in Bangalore; Editing by Harikrishnan Nair and Peter Graff)

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The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Shritama Bose

MUMBAI, April 30 (Reuters Breakingviews) - The jobs crisis stirring in India’s vast outsourcing industry spells trouble for the country’s $4 trillion consumption-led economy. With the gap between household income and spending already widening, the consequences of the churn on finance and markets will be far-reaching.

White collar jobs are starting to disappear in the world’s services capital where many global firms employ thousands of staff in global capability centres that are responsible for everything from back-office functions to fraud detection to critical research and development.

Following the launch of artificial intelligence tools by Anthropic and others that allow companies do the same amount of work with fewer people, Oracle ORCL.N laid off 10,000 workers, or one-fifth of its India workforce in March, and Amazon.com AMZN.O let go of 500 people in the country in January, the Economic Times reported, citing sources. It looks like just the beginning of the headcount reductions.

One executive of a global bank told Reuters Breakingviews their workforce in India could shrink by one-third. This could happen quickly within just one or two years because of the double digit attrition rates at offices of global firms in cities including Bengaluru, Gurugram and Pune. JPMorgan Chase JPM.N has a whopping 55,000 employees in the country, which equals about one-fifth of its total workforce and includes one-third of all its technologists; HSBC’s HSBA.L 47,000 local employees make up 23% of its global headcount.

Then there is also “AI deflation” – the term Indian IT firms that typically lap up fresh graduates use to refer to slowing revenue growth. Annual revenue in U.S. dollar terms at industry leader Tata Consultancy Services TCS.NS shrunk for the year ended March 2026, marking the first decline since the $97 billion company's initial public offering ​in 2004.

Altogether, global capability centres and the IT sector employ up to 15 million people who anchor India’s middle class and whose jobs are under threat from generative AI, Bernstein analysts Venugopal Garre and Nikhil Arela said last week in an open letter to Prime Minister Narendra Modi.

Though this is a small fraction of India’s 616-million-strong workforce comprised mostly of swathes of informal and agricultural workers, the AI vulnerable cohort represents a sizeable chunk of the employed within the rising middle class. With fewer jobs, there will also be pressure on salaries for those who keep theirs.

For India, advances in generative AI are intensifying the intractable challenge of creating enough jobs in a country that skipped over the traditional manufacturing route and where 8 million people enter the workforce each year. Modi's push to drive manufacturing isn’t softening the blow much either, thanks to factory automation.

There are already signs that India’s world-beating 7.8% growth is decoupling from employment generation: New Delhi’s latest Economic Survey notes that since 2022 – the same year that OpenAI launched ChatGPT -- the labour intensity of output has marginally declined. That rupture will deepen unless workers upskill, the survey says, with the change coming “not in a single shock, but in a quiet, steady drift”.

This threatens a blow to spending on what people want, rather than what they need. Private consumption accounts for about 60% of GDP and the top 140 million Indians who on average each earn roughly $15,000 per annum, according to Blume Ventures, drive two-thirds of discretionary spending.

Any contraction in their incomes could force them to cut back, hitting sales of goods from new homes to cars and demand for experiences from dining out to live events. There will be a ripple effect too: Middle-class homes in India employ cooks, cleaners and drivers.

Demand for their services, and those of India’s vast gig economy servicing the middle class, would recede. That puts at risk earnings of carmakers, consumer groups and financial services providers which, together with Mukesh Ambani's Reliance Industries RELI.NS – the owner of India’s largest retailer - account for nearly 62% of the benchmark Nifty 50 index .NSEI. Sluggish consumption is already hurting some of them: small car sales slowed at Maruti Suzuki India MRTI.NS last year and Unilever's ULVR.L Indian unit has been grappling with weak urban demand.

A potential 30% reduction in the 15-million-strong outsourcing and global capability centre workforce over the next two years could shrink the top consuming class by about 5 million to 135 million.

Assuming Blume Ventures' annual income estimate of $15,000, this cohort's total spending power stands to fall by roughly $75 billion a year, assuming those people don't find other employment or sources of income. That's equivalent to 10% of the Nifty 50 constituents’ net sales of 71.3 trillion rupees ($755 billion) for the financial year ended March 2025, per data from the National Stock Exchange.

Overall household savings are already declining as indebtedness mounts: Indians saved barely 23% of their personal disposable income in the financial year to March 2025, according to an estimate by CLSA, down from nearly 30% two decades earlier. Debt as a share of disposable income surged to 55% from 31% over the same period.

While India’s household debt to GDP ratio is much lower than for most peer economies, meagre earnings mean Indians end up spending 13% of their income on repaying borrowings, higher than 8.5% for China and 8% for the US.

Much of what Indians borrow goes towards financing consumption rather than creating assets. Households are leveraging up to pay for everything from overseas vacations to weddings and smartphone purchases.

Such financing, which the Reserve Bank of India calls non-housing retail loans, makes up 55% of household obligations and is growing faster than mortgages. India's household debt to GDP ratio stands at 41.9%. If half of those borrowings are consumption-linked, it implies household discretionary debt amounts to roughly 21% of GDP. Apply that to India’s nominal GDP of 331 trillion rupees for 2024-25 and you have at risk loans worth 69 trillion rupees across the country’s banks and non-bank lenders.

This threatens the loan quality at financial institutions led by the $130 billion HDFC Bank HDBK.NS as well as lenders backed by global investors from Sumitomo Mitsui Financial 8316.T to Blackstone BX.N who are accelerating their expansion in India to tap retail credit demand.

The impact of AI on the global workforce may ultimately create more jobs. First, though, it may turn India’s already weak consumption and much-vaunted demographic dividend into a nightmare.

Follow Shritama Bose on LinkedIn and X.

(Editing by Una Galani; Production by Aditya Srivastav)

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Recasts, adds details, background, dealer's comment

April 17 (Reuters) - India issued an order on Friday listing banks authorised to import gold and silver, providing relief for banks that were forced to halt imports because the list's publication was delayed.

Reuters reported earlier on Friday that more than 5 metric tons of gold and around 8 metric tons of silver were stuck without customs clearance pending the order, which is typically issued at the start of each financial year.

The Directorate General of Foreign Trade, part of the Ministry of Commerce and Industry, which issued the order on Friday, did not give any reason for the delay.

Authorised by the Reserve Bank of India, the order permits 15 banks, including the State Bank of India SBI.NS, HDFC Bank, HDFC.NS, Bank of India BOI.NS to import both gold and silver from April 1, 2026, to March 31, 2029.

It also allows Union Bank of India and SBER Bank to import only gold.

None of the banks made any public comment.

A Mumbai-based dealer with a private bank, speaking on condition of anonymity, said banks would now be able to clear consignments from customs.

(Reporting by Rajendra Jadhav and Shilpa Jamkhandikar; Editing by YP Rajesh and Barbara Lewis)

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