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Wednesday, August 05, 2020

Recovery could lose steam due to partial lockdown: Aditya Puri

“Rural economy seems to have been relatively isolated from the virus. There was too much pessimism around. In response to high frequency indicators… there was marked improvement in May which sustained in June,” Aditya Puri said.

By: ENS Economic Bureau | Mumbai | Updated: July 19, 2020 7:15:24 am
Aditya Puri, MD at HDFC Bank.

HDFC Bank MD & CEO Aditya Puri on Saturday warned that the recovery in the economy witnessed in May and June could “lose steam” due to the steady rise in COVID infections and partial lockdown in several parts of the country.

Maintaining that the economy seems to have recovered from the April drop, Puri said, “Rural economy seems to have been relatively isolated from the virus. There was too much pessimism around. In response to high frequency indicators… there was marked improvement in May which sustained in June.”

Addressing his last AGM at the bank, Puri said, “The robust rabi crop and satisfactory progress of khariff crop has manifested in healthy income in the hands of the farm sector. However, there could be moderation in demand going forward.”

The bank earned a net profit of Rs 6,658.6 crore for June 2020, an increase of 19.6 per cent over the quarter ended June 2019.

Provisions and contingencies for the quarter ended June 2020 were Rs 3,891.5 crore (consisting of specific loan loss provisions of Rs 2,739.8 crore and general provisions and other provisions of Rs 1,151.7 crore) as against Rs 2,613.7 crore for the quarter ended June 30, 2019.

He cautioned that a part of this demand is pent-up from the lockdown phase which could lose steam. “The steady rise in infections means containment remains a policy challenge and partial lockdowns imposed in different pockets could hinder a full grown recovery,” Puri said.

Puri said it will return around Rs 200 crore to Altico Capital as directed by the Reserve Bank of India. On the vehicle loan business, Puri said, “We had received some whistle-blowing complaints. Internal enquiries on the complaints received have not brought out any conflict of interest issue nor does it have any bearing on our loan portfolio.”

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