HDFC Bank’s retail deposit share fell to 55.9% of total deposits in fiscal year 2026, down from 56.7% in FY25 and 58.1% in FY23, according to data reported by ET BFSI. This marks a gradual weakening in the granularity of the bank’s deposit franchise, reflecting a shift toward higher reliance on wholesale funding.
The decline in retail deposits has been accompanied by an increase in wholesale funding, signaling a change in the bank’s funding mix. The bank’s retail deposit base, which is generally considered more stable, has been shrinking over the past three years. ET BFSI noted this trend as a sign of evolving funding strategies at HDFC Bank, which has traditionally been known for its strong retail deposit franchise.
This shift matters because retail deposits are typically viewed as a more stable and low-cost source of funds for banks, while wholesale funding can be more volatile and expensive. The change in HDFC Bank’s deposit composition could affect its cost of funds and risk profile. Compared to peers, HDFC Bank’s retail deposit share decline highlights challenges in maintaining granular funding amid competitive pressures in the Indian banking sector.
HDFC Bank’s deposit franchise changes come as the bank navigates a complex macroeconomic environment and evolving market dynamics. The next quarterly results, expected in late October, will provide further clarity on the bank’s deposit trends and funding strategy, according to ET BFSI.