It has been over a week since the Reserve Bank of India announced the withdrawal of Rs 2,000 notes, and individuals have been exploring various avenues to utilize these notes beyond visiting banks for exchanges. E-commerce deals, fuel stations, supermarkets, and even gold purchases have become alternative channels for utilizing the notes.

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Amitabh Chaudhry, the Managing Director of Axis Bank, acknowledged the speculation that people are resorting to non-banking means to recycle their Rs 2,000 notes. He mentioned that it remains to be seen how this practice will impact the overall system in due course.

Chaudhry also observed that more individuals are choosing to deposit the notes rather than exchange them. Axis Bank has been requesting customer details for those opting for exchanges, but Chaudhry believes that depositing the notes directly into accounts is a more favorable option for customers.

However, he noted that some individuals still prefer to keep a certain amount of cash on hand for emergencies, leading to a limited number of exchanges taking place.

Also read: Axis Bank Q4 Results | Posts net loss of Rs 5,728 crore, declares dividend

Further talking about the Q4FY2023 performance of the bank, Chaudhry said that Axis Bank saw an increase in deposit costs in the fourth quarter and the bank further expects the deposit costs to increase as the repricing continues to happen. However, he expect the margins to trend down a little bit in the next couple of quarters.

“We are expecting the bank credit growth to normalize around 16 percent. The deposit growth in FY24 will be about 12.5 percent; next quarter it will be about 15-16 percent, but for FY23 it will be 12.5 percent and deposit growth will be 10.5 percent. So, the expectation in terms of growth, to some extent, is muted," he said.

Also read: Axis Bank shares: Why analysts see 28% upside in the bank stock despite Q4 loss

The bank posted a standalone loss of Rs 5,728.42 crore for the March quarter of FY23. The loss is on account of the buying cost of Citi Bank’s India consumer business during the quarter. The lender had reported a profit of Rs 4,117.77 crore in the corresponding period last year.

The bank’s net interest income, the difference between interest earned and interest expended, during January-March 2023 jumped 33.1 per cent year-on-year to Rs 11,742.2 crore.

On the asset quality front, Axis Bank’s gross non-performing assets (GNPAs) improved by 80 basis points y-o-y and 30 bps q-o-q to 2.02 percent at the end of March 2023 quarter. Its net NPAs also decline to 0.39 percent, a decline of 34 bps y-o-y and 8 bps qoq.

Shares of Axis Bank are trading at Rs 933, up 0.4 percent from the previous close on the BSE.

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First Published:May 30, 2023 2:13 PM IST