Exploring the banking landscape: Former HDFC head Keki Mistry shares insights on housing loans, liquidity, and geopolitical factors

In this episode of the Current Account podcast, Piyush Shukla speaks with Keki Mistry, former Vice Chairman & CEO of HDFC, and independent director and advisor in various companies on the future of housing finance, economic growth, and the banking sector in India. Mistry shares his insights on the under-penetration of the housing market in India and how the country's demographic trends and government support for housing will drive long-term demand for home loans. He highlights that, despite short-term fluctuations, housing finance will remain strong for decades due to factors such as India's youthful population and its growing middle class.  On the topic of banking, Mistry addresses concerns about capital market investments affecting bank deposits, explaining that the belief that money flowing into capital markets leads to lower bank deposits is completely incorrect. "Take the example of a person buying a share. If I buy a share from you, how do I pay you? I pay you by cheque. You then deposit that cheque into your bank account, which means the money moves from my bank account to yours." He reassures listeners that while people invest in capital markets, the level of deposits in banks remains unaffected.  Furthermore, Mistry discusses the importance of liquidity management by the Reserve Bank of India (RBI), sharing his expectations for future rate cuts. "Personal view is that we will see a rate cut in this April policy," he notes, highlighting the potential impact of inflation and other factors on India's economic policy.  Listen in for a detailed conversation.