'Legal issues make reverse mortgage unsuitable'
HDFC Bank
MD & CEO Sashidhar Jagdishan told shareholders at the bank's annual general meeting that reverse mortgage loans do not work in the Indian context because of "various legal and operational issues.
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He added, "I'm not aware of any bank currently offering it. One bank did in the past, but they have stopped. This product is unsuitable for both customers and institutions." A reverse mortgage allows senior citizens to borrow against the value of their home without selling it, receiving funds every month as income. The loan is repaid, with interest, when the borrower sells the house or passes away. Reverse mortgage was introduced in India following guidelines from the National Housing Bank.
Jagdishan also detailed the bank's ongoing technology upgrades, including phased rollouts of a new mobile app and net banking interface. "The new mobile app is being deployed... the migration into the new mobile app will be completed for a lot of customers before the fiscal year is up," he said. The bank is also planning to revamp its website and has in-house teams building platforms instead of relying on external vendors.
The bank is introducing generative AI for process re-engineering, operational efficiencies, and customer service, but Jagdishan stressed that these tools will not replace human decision-making. "We are focusing on the guardrails... used only for basic, mundane activities in the initial phase, not to substitute human judgment," he said.
On the bank's growth and net interest margin (NIM) trajectory post-merger, Jagdishan said deposit mobilisation to improve the credit-deposit ratio had come at the cost of low-cost current and savings account (CASA) deposits.
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