Posted on April 15, 2025, by Niftynews
HDFC Bank shares rallied over 3.4% on April 15, trading at ₹1,870.30 on the NSE in early hours, as India’s largest private lender reduced interest rates on savings accounts for deposits under ₹50 lakh. The move comes on the heels of the Reserve Bank of India’s (RBI) repo rate cut on April 9 and signals a broader shift in the bank’s cost and liquidity management strategy.
At a time when the market is closely watching how banks respond to the central bank’s rate actions, HDFC Bank’s proactive step to trim rates has not only been interpreted as a confident move but also one that aligns with an expected rate-easing cycle.
Savings Rate Reduced from 3% to 2.75%
Starting April 12, savings account holders with deposits below ₹50 lakh will now earn 2.75% per annum, down from the previous 3%. For balances above ₹50 lakh, the rate will remain 3.25%.
This is the first savings account rate cut since June 2020, when banks adjusted rates in response to the economic slowdown during the pandemic. Notably, HDFC Bank has not raised its savings account interest rate in over 14 years, reinforcing its strategy of encouraging customers to shift surplus capital into fixed deposits, which offer higher returns.
Goldman Sachs: Confidence in Deposit Accretion, Margin Relief Expected
According to Goldman Sachs, the rate cut suggests HDFC Bank’s confidence in strong deposit inflows despite the lower interest offered. The brokerage also emphasized that the move aligns with the RBI’s policy direction, which aims to maintain liquidity and ease funding costs for banks.
“The trimming of savings rates is a signal of improving liquidity conditions and could help ease margin pressure amid an anticipated rate cut cycle,” Goldman Sachs noted in its client note.
This sentiment is supported by RBI’s latest monetary policy actions, which saw a 25 basis point repo rate cut, bringing it down to 6% from 6.25%.
System Liquidity Turns Positive: RBI Data
In his monetary policy statement, RBI Governor Sanjay Malhotra highlighted a remarkable turnaround in the banking system’s liquidity. From a deficit, it turned into a surplus of ₹1.5 lakh crore as of April 7, 2025, thanks to government expenditure and other liquidity-enhancing measures that infused over ₹6.9 lakh crore into the system by March-end.
This surplus liquidity provides banks with greater flexibility in rate setting, including on savings accounts and lending products, making HDFC Bank’s move both timely and strategic.
HDFC Bank Shares: Price Action and Market Sentiment
HDFC Bank shares surged 3.46% to ₹1,869.20 during the April 15 session on BSE, backed by strong volume activity of over 10 million shares. With this move, the stock emerged as one of the top gainers on the Nifty 50 index.
Performance Snapshot:
Up 21% over the past 12 months
Short-term bullish momentum following April’s rate-related announcements
Trading near recent highs, attracting both retail and institutional buying
Technical indicators support continued interest, especially as the bank balances growth with profitability through rate optimization and digital banking initiatives.
Outlook: What’s Next for HDFC Bank Shares?
With the central bank signaling a shift towards monetary easing and the system awash with surplus liquidity, banks like HDFC are well-positioned to optimize margins without sacrificing deposit growth.
Investors should watch for:
Further adjustments to retail and corporate lending rates- Q1 FY26 earnings to reflect improved net interest margins (NIMs)
Changes in deposit and credit growth patterns post-policy shift
Given HDFC Bank’s strong fundamentals and leadership in retail banking, analysts remain broadly optimistic about the medium-to-long-term potential of HDFC Bank shares.
Conclusion
The recent savings rate cut by HDFC Bank may appear subtle, but the market response suggests otherwise. As liquidity conditions ease and monetary policy turns accommodative, HDFC Bank shares are gaining momentum, backed by institutional confidence and strategic foresight. With Goldman Sachs and other brokerages pointing to reduced margin pressures and favorable market dynamics, the stock is likely to remain a strong contender in banking portfolios.
