Mumbai/New Delhi, April 29 -- India's largest private sector lender is cracking down on the practice of using temporary deposits at the end of reporting quarters to shore up numbers. HDFC Bank Ltd has sent multiple emails to employees, the latest one in late March, stating this would not be tolerated. Mint has seen a copy of the March-end email that notes the practice of creating deposits by using the bank's own loan facilities. "During (the) bank's due diligence check, temporary creation of CASA/TD (current account and savings account/term deposits) has been identified by utilising CCOD (cash credit, overdraft) without observable business logic/requirements," it said. As per HDFC Bank's website, cash credit (CC) is a short-term loan offered to companies, businesses and financial institutions for working capital requirements. On the other hand, an overdraft (OD) facility refers to the credit funding offered by banks to individuals and companies. The mail said that HDFC Bank does not encourage such activities and supervisors should guide staff not to pursue such transactions. The mail further warned of "necessary staff action" on identifying non-compliance. Two people aware of the matter said the bank has acted after noting such transactions. While one of them said the bank has taken disciplinary action, the other said the lender has also started sensitising employees. Mint spoke to industry experts to piece together the practice. Business customers are often entitled to certain working capital loans via CCOD. Bank relationship managers will request certain business customers to utilise some of their CCOD limit on the last day of a quarter. Once they agree to utilise the credit line, the bank transfers the amount to current accounts of these customers, which reflects as a deposit. Quarter-end numbers would, therefore, show higher deposits. These temporary deposits would be reversed the next day or within two days. While the customer would have to pay a small interest for utilising the CCOD limit, the branch would try to neutralise the impact. Senior bankers, consultants and experts said this was not an uncommon practice. "These customers depend on relationship with a bank and cannot say no when asked for some favour," said a senior consultant who works with top-tier bBanks anks. An HDFC Bank spokesperson said as a large organisation with operations across the country, several guidelines and process-related communications were sent routinely. "These include communication reiterating that healthy practices be maintained at all times," the spokesperson said. "As regards other aspects of your query, we strongly urge the publication to refrain from speculative commentary. The bank remains committed to maintaining the highest standards of ethics and professional integrity in its operations."...