'You have to be smart about where you are lending'

Axis Bank MD & CEO Amitabh Chaudhry believes the Citi acquisition has brought the bank more than it had expected in terms of business and retained customers.

- Axis Bank MD & CEO Amitabh Chaudhry

Chaudhry tells Shobhana Subramanian that deposits are a challenge and that until there is enough durable liquidity in the system, rates on deposits are unlikely to come down. Excerpts:

What is the bank's strategy to garner more deposits?

Earlier, we had only a certain part of the liability franchise that was focusing on deposits and others were servicing customers. Now, we are saying that anyone involved in branch banking has to be sourcing deposits. That was one big change. Also, our outflow rates, in comparison to the competition, were one of the highest. For instance, if it is a financial institution, frankly it's not a lendable deposit, while with retail deposits, the outflows are lower. We changed our outflow rates, and are now best-in-class. We moved out of certain businesses. We had term deposit rates that were higher than our peers, and we have brought them down.

How is that working out?

We are going about it methodically to ensure that our army marches to a particular tune. We have added to the liability franchise team.