Housing Development Finance Corporation (HDFC) Chairman Deepak Parekh on Wednesday said that the lender had consciously stayed away from funding perceived riskier assets. In a letter to shareholders, Parekh said: "Reflecting back, in the first half of the financial year, we were often asked why we were 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.

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"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."

Parekh, in the letter which is a part of the annual report, said that in the current environment, the company had to work "extremely hard to preserve asset quality".

"While our non-performing loans have been considerably lower than several others in the financial sector, we know we cannot rest on these laurels. We try to err on the side of caution in our non-individual lending, but admittedly, we did make a few wrong calls and underestimated certain risks," he said.

Besides, he said that the company has "adequate buffers" for contingencies.

Parekh also said that Indian financial system is moving to a new landscape, backed by a stronger regulatory and supervisory framework.

"This may entail recalibration amongst all players, but it will provide stronger safeguards at a systemic level," he said.

"I remain confident that the new government along with the regulators will prioritise re-instilling a culture of trust across the Indian banking and financial sector."

According to him, housing has become more affordable and growth is driven by volume... "this is the key reason for our optimism."