HDFC Bank Shares Surge 3% as Savings Rate Cut Signals Deposit Confidence, Margin Relief Seen

Shares of

k, India's largest private sector lender, witnessed a significant 3 percent jump during today's trading session. This surge followed the bank's decision to reduce its interest rate on savings accounts for deposits up to ₹50 lakh. The bank announced a reduction in its savings account interest rate from 3 percent to 2.75 percent, effective April 12th, for deposits below the ₹50 lakh threshold. For deposits exceeding this limit, the interest rate will remain at 3.25 percent per annum. The last time HDFC Bank implemented a rate cut for this deposit slab was during the initial phase of the COVID-19 pandemic in June 2020. As of 9:25 am on the National Stock Exchange (NSE), HDFC Bank's shares were trading at ₹1,870.3 apiece, marking a substantial gain of 3.5 percent and positioning it as one of the top performers on the Nifty 50 index. Analysts at Goldman Sachs noted that HDFC Bank's move to trim its savings rates indicates a strong level of confidence in its deposit accretion. Furthermore, they believe this decision aligns with the recent stance of the Reserve Bank of India (RBI) following its latest monetary policy meeting, where the policy rate was reduced. Goldman Sachs anticipates that this strategic adjustment in savings rates could lead to an easing of margin pressure for HDFC Bank.