HDFC Bank has sold a housing loan portfolio of about Rs 6,000 crore ($717 million) as part of the exercise to lighten its credit load amid regulatory pressures on the industry.

The portfolio was sold to about half a dozen state-controlled banks through private deals, Bloomberg reported.

The Mumbai-based bank also unloaded another pool of car loans worth about Rs 9,060 crore, securitized in a fixed income product called pass-through certificates, Bloomberg quoted sources as saying.

The lender had been engaged in talks to offload the pool to about a dozen local asset management companies.

The deals confirm India’s largest bank in market value is intensifying efforts to shrink its retail loan portfolio amid heightened regulatory pressure to improve the sector’s credit-deposit ratios — a measure of how much of an institution’s deposits are being lent out.

The portfolio sales would help HDFC Bank improve its ratio that has worsened in recent years as credit growth outpaced deposit in the nation and following its merger with mortgage lender Housing Development Finance Corp, Bloomberg reported.

The buyers who subscribed to the pass-through certificates, backed by HDFC’s car loans, included ICICI Prudential AMC, Nippon Life India Asset Management Ltd., SBI Funds Management Pvt. and Kotak Mahindra Asset Management Co. The certificates offered yields in the range of 8.02% to 8.20% monthly for three tranches, Bloomberg quoted sources as saying.

Liquidity issues

In June, HDFC also sold a Rs 5,000 crore loan portfolio. Its credit-deposit ratio stood at 104% at the end of March, higher than the 85% to 88% rate in the previous three fiscal years, according to ICRA Ltd., an affiliate of Moody’s Ratings.

The fact that deposit growth is lagging that of credit “may potentially expose the banking system to structural liquidity issues,” the central bank said in August.