Noted banker Deepak Parekh, who heads the mortgage major HDFC as its chairman, said it is important to stay optimistic and recognise that the economy will tide over the short-term challenges it has been facing for some time now.

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In a letter to the shareholders, Parekh said he is confident that the new government along with the regulators will prioritise re-instilling a culture of trust across the banking and financial sector.

"It is important to stay optimistic and recognise that the economy will tide over some of the short-term challenges it faces," he said, adding, however, this should not take away our focus from the broader picture that the country stands tall today.

On the strong political mandate that the recent elections gave, he said "the poll outcome is a strong mark of confidence and the country stands ready to welcome patient capital seeking to earn attractive returns."

Thanking retail depositors who put their hard-earned money with the mortgage financier, he said HDFC's strength has been its ability to seamlessly straddle between wholesale and retail funding.

"They say, 'little by little, a little becomes a lot.' This best characterises the growth in our retail deposits. We cannot be more grateful to the thousands of small investors who entrust their hard-earned savings with us," he said.

Parekh said in the first half of FY19, HDFC was asked why it was not growing as aggressively as others in certain segments of the commercial real estate market.

"We held our ground by consciously staying away from funding what we perceived were riskier assets. Unsurprisingly, in the second half of the year, we were asked what we did differently that enabled us to stay resilient and be the preferred choice in the flight to safety. Perhaps, a combination of experience and adhering to our risk appetite held us in good stead," he said.

In the current environment, HDFC worked extremely hard to preserve asset quality and its NPAs have been considerably lower than several others in the financial sector, he said, adding, "we know we cannot rest on these laurels."

However, he admitted that the company made a few wrong calls in the non-individual lending segment and underestimated certain risks.

"Many would agree that this is par for the course in any lending business. Yet, we know that stakeholders value us for our transparency and we will not compromise or shy away from owning up to genuine mistakes," Parekh said.

He said during the year loans were written off only after all possible options were exhausted. "Barring these few loans, our ethos of being conservative in our financial decisions has paid us off well. We know that the best time to save for a rainy day is when we have windfall gains. This has ensured that we always have adequate buffers for contingencies".

Amongst retail finance in the country, home loans continue to stand out - both in terms of growth and asset quality. "For us, it has been rewarding that our growth has come from increased volume rather than large-ticket loans."

According to Parekh, there is a need to focus on another demographic aspect - the population of senior citizens which is expected to grow to 173 million by 2025. By 2050, we are estimated to have 240 million senior citizens.