HDFC Bank

HDFC Bank Limited is an Indian banking and financial services company headquartered in Mumbai, Maharashtra. Incorporated in 1994, it is the second largest private bank in India as measured by assets.^[7] It is the largest bank in India by market capitalization as of February 2016, at approximately Rs.2,56,107.95 crores.^[8] According to the Brand Trust Report 2015, HDFC was ranked 58th among India's most trusted brands.^[9]

Total balance sheet size as of December 31, 2015 was Rs. 687,892 crores as against Rs. 534,855 crores as of December 31, 2014.^[10]

The Bank’s total income for the quarter ended December 31, 2015 was Rs.18,283.3 crores, up from Rs.14,930.7 crores for the quarter ended December 31, 2014. Net revenues (net interest income plus other income) increased by 20.7% to Rs. 9,940.7 crores for the quarter ended December 31, 2015 as against Rs. 8,234.8 crores for the corresponding quarter of the previous year.^[11]

HDFC Bank is among the top 50 most valued global bank in terms of market capitalization. It is India’s second-largest private lender in terms of asset size, ranks 45th, with a market capitalization of $39 billion, Bloomberg data show. ^[12]

Mr. Aditya Puri is the Managing Director HDFC Bank, and has held this position since 1994. He was recently named in the Barron’s list of Best 30 CEOs and business leader of the year by AIMA.^[13]

History

In August 1994, ‘HDFC Bank Limited’ was incorporated, with its registered office in Mumbai, India. It commenced operations as a Scheduled Commercial Bank on 5 January 1995 after receiving banking license. The bank also entered into strategic alliance with National Westminster Bank group.

The bank was promoted by Housing Development Finance Corporation, a premier housing finance company (set up in 1977) of India. HDFC was amongst the first to receive an ‘in principle’ approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of RBI’s liberalization of the Indian Banking Industry in 1994. HDFC Bank’s first corporate office and a full service Branch at Sandoz House, Worli was inaugurated by the then Union Finance Minister, Dr. Manmohan Singh.

On March 14, 1995, HDFC Bank went public with the launch of its IPO.

Acquisition

Times Bank

In February, 2000, Times Bank Limited (a new private sector bank promoted by Bennett, Coleman & Co. / Times Group) merged with HDFC Bank Ltd. This was the first merger of two private banks in the New Generation Private Sector Banks category. As per the scheme of amalgamation approved by the shareholders of both banks and the Reserve Bank of India, shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 shares of Times Bank.^[14]

Centurion Bank of Punjab

In 2008, Centurion Bank of Punjab (CBoP) was acquired by HDFC Bank Ltd. HDFC Bank Board on 25 February 2008 approved the acquisition of CBoP for Rs 9,510 crore in one of the largest mergers in the financial sector in India. As per the scheme of amalgamation, shareholders of CBoP received 1 share of HDFC Bank for every 29 shares of CBoP.^[15]

Products and Services

Wholesale banking services

HDFC Bank provides a range of commercial and transactional banking services, including working capital finance, trade services, transactional services, cash management, etc. to large, small and mid-sized corporates and agriculture-based businesses in India. ^{[16] [17]}

An HDFC Bank Branch

Retail banking services

HDFC Bank was the first bank in India to launch an International Debit Card in association with VISA (Visa Electron). The bank also issues the MasterCard Maestro debit card.^[18][19] The Bank launched its credit card business in late 2001. By the end of June 2013, it had a credit card base of 5.94 million.^[20] By March 2012, the bank had a total card base (debit and credit cards) of over 19.7 million.The Bank is also one of the leading players in the "merchant acquiring" business with over 240,000 point-of-sale (POS) terminals for debit / credit cards acceptance at merchant establishments.^[2][21]

Treasury

The bank has three main product areas - Foreign Exchange and Derivatives, Local Currency Money Market & Debt Securities, and Equities. These services are provided through the bank's Treasury team. To comply with statutory reserve requirements, the bank is required to hold 25% of its deposits in government securities. The Treasury business is responsible for managing the returns and market risk on this investment portfolio.

Operations

As of December 31, 2015, the Bank’s distribution network was at 4,281 branches in 2,505 cities in India, and all branches of the Bank are linked on an online real-time basis.^[22] The Bank has overseas branch operations in Bahrain, Hong Kong and Dubai.^[23] Customers across India are also serviced through multiple delivery channels such as Phone Banking, Net Banking, Mobile Banking and SMS based banking.^[24]

The Bank also has a network of 11,843 ATMs across India.^[25]

Subsidiaries

HDB Financial Services Limited (‘HDBFS’) is engaged in retail asset financing. It is a non-deposit taking non-bank finance company (NBFC).^[26] Apart from lending to individuals, the company grants loans to micro, small and medium business enterprises. It also runs call centers for collection services to the HDFC Bank’s retail loan products. The Company is promoted by HDFC Bank Ltd which has 97.42% shareholding in the Company as on 31 March 2012.^[27] As of March 31, 2015, HDBFS had 425 branches in 265 cities. During the FY 2013-14, HDBFS had turnover of Rs 1688.27 crores and profit after tax of Rs 209.24 crores.^[28]

HDFC Securities Limited (‘HSL’) is engaged in stock broking. As of March 31, 2014, HDBFS has 200 branches across 160 cities. HDFC Bank has 89.24% shareholding in HSL. During the FY 2013-14, HSL had turnover of Rs 263.1 crores and profit after tax of Rs 78.4 crores.^[29]

Listings and shareholding

The equity shares of HDFC Bank are listed on the Bombay Stock Exchange, where it is a constituent of the BSE SENSEX index,^[30] and the National Stock Exchange of India,^[31] where it is a constituent of the CNX Nifty. Its American Depositary Shares are listed on the NYSE.^[2] Its Global Depository Receipts (GDRs) are listed on the Luxembourg Stock Exchange where 2 GDRs represent one underlying equity share of HDFC Bank.^[2]

Employees

As of 31 March 2015, HDFC Bank Ltd had 76,286 employees, including 12,680 women.^[33] During the financial year 2013-14, the company incurred Rs. 234.99 crore on employee benefit expenses.^[34]

CSR Activities

HDFC Bank has taken several initiatives as part of its corporate social responsibility. It has collaborated with several NGOs to assist in its activities.^[35]

Awards and recognitions

2015

2014

2013

2012

Controversies

Money laundering allegations
On 14 March 2013 an online magazine named Cobrapost.com released video footage from Operation Red Spider showing high-ranking officials and some employees of HDFC bank and two other leading banks, willing to turn black money into white, a violation of Money Laundering Control Act.

Following the release of the footage, the Government of India and RBI ordered an inquiry.^[96][97][98] The banks under question also conducted investigations of their own. HDFC appointed Deloitte Touche Tohmatsu to conduct a forensic inquiry. The bank also appointed Amarchand & Mangaldas & Suresh A Shroff & Co (AMSS), a law firm based in India, to investigate in association with the internal departmental inquiry, the breaches in the bank’s code of conduct and ethical standards by the officials involved.^[99] On 16 March 2013, HDFC released a statement announcing the suspension of over 20 employees involved in the videotape to ensure fair and unbiased investigation process.^[100][101]

The RBI forensic investigation did not reveal any prima facie evidence for the allegations of money laundering. Deputy Governor at RBI, K.C. Chakrabarty, said in an interview that no transactions had taken place.^[102] The Executive Director of HDFC, Paresh Sukthankar, also confirmed that their investigations revealed the same on 24 April 2013, "The issue is being reviewed and investigated from multiple quarters. Clearly, all the investigations have shown that there have been no instances of transactions actually taking place. Our belief is that the existing processes seem to have worked in not allowing these transactions to happen."^[101]

However, RBI investigations revealed violations of KYC (Know Your Customer) norms, for which the three banks were imposed penalty, with Rs. 4.5 crores imposed on HDFC.^[103]

See also

• Bank
• Private-sector banks in India
• List of banks in India
• List of companies of India

References

^[104]

External links

Wikimedia Commons has media related to HDFC Bank.

• Official website
• Jobs at HDFC Bank
• HDFC Bank on Facebook
• HDFC Bank at Times of India
• HDFC Bank at Bombay Stock Exchange
• HDFC Bank at National Stock Exchange of India
• HDFC RED - Associated Company Website
• Samir Bhatia#cite ref-1
• HDFC Bank IFSC Codes

• • Business data for HDFC Bank:
  • Reuters
  • SEC filings

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