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HDFC Bank

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HDFC Bank Limited
Company typePublic company
BSE: 500180
NSE: HDFCBANK
NYSE: HDB
BSE SENSEX Constituent
CNX Nifty Constituent
IndustryBanking, Financial services
FoundedAugust 1994
HeadquartersMumbai, Maharashtra, India
Area served
Worldwide
Key people
Aditya Puri (MD)[1]
ProductsInvestment Banking
Investment Management
Wealth Management
Private Banking
Corporate Banking
Private Equity
Finance and Insurance
Consumer Banking
Mortgages
Credit Cards[2]
Revenue₹9,940.7 crore (US$1.2 billion) (2015)[3]
8,058,900,000 United States dollar (2022) Edit this on Wikidata
₹3,356.8 crore (US$400 million) (2015)[4]
Total assets₹687,892 crore (US$82 billion) (2015)[4]
Number of employees
76,286 (March 2015)[5]
WebsiteHDFCBank.com

HDFC Bank Limited is an Indian banking and financial services company headquartered in Mumbai, Maharashtra. It has about 76,286 employees including 12,680 women[6] and has a presence in Bahrain, Hong Kong and Dubai.[7] HDFC Bank is the second largest private bank in India as measured by assets.[8] It is the largest bank in India by market capitalization as of February 2016.[9] It was ranked 58th among India’s most trusted brands according to Brand Trust Report, 2015.[10]

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. 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]

History

In 1994, HDFC Bank Limited was incorporated, with its registered office in Mumbai, India. Its first corporate office and a full service branch at Sandoz House, Worli was inaugurated by the then Union Finance Minister, Dr. Manmohan Singh.

It operates in 2,505 cities in India with 4,281 branches which are linked on an online real-time basis. The Bank has a network of 11,843 ATMs across India.[12]

Acquisitions

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.[13]

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.[14]

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.[15][15]

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.[16][17] 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.[18] 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][19]

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.[20] The Bank has overseas branch operations in Bahrain, Hong Kong and Dubai.[21] Customers across India are also serviced through multiple delivery channels such as Phone Banking, Net Banking, Mobile Banking and SMS based banking.[22]

The Bank also has a network of 11,843 ATMs across India.[20]

Subsidiaries

HDB Financial Services Limited (‘HDBFS’) is engaged in retail asset financing. It is a non-deposit taking non-bank finance company (NBFC).[23] 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.[24] 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.[25]

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.[26]

Listings and shareholding

The Equity shares of HDFC Bank are listed on Bombay Stock Exchange and the National Stock Exchange of India. Its American Depository Shares are listed on NYSE and the Global Depository Receipts are listed on the Luxembourg Stock Exchange where two GDRs represent on equity share of HDFC Bank.

Shareholders (as of 31 December-2015) Shareholding[27]
Promoter Group (HDFC) 21.57%
Foreign Institutional Investors (FII) 32.40%
Individual shareholders 8.5%
Bodies Corporate 07.50%
Insurance companies 05.38%
Mutual Funds/UTI 8.65%
NRI/OCB/Others 00.29%
Financial Institutions/Banks 2.75%
ADS/GDRs 18.78%

CSR Activities

HDFC Bank has taken several steps as a part of their Corporate Social Responsibility. It has collaborated with several NGOs to assist in its activities.

Initiative Objective Activities
Sustainable Livelihood Provide empowerment to the rural section of the country, especially women. Conducts training for occupational skills, credit counselling, capacity building program, sustainable livelihood initiative
Financial Literacy Financial literacy in 600 schools across Andhra Pradesh and Odisha. Rural financial literacy programs under the aegis of RBI.
Education Aim to making every child literate with quality education. Friends Union for Energising Lives (FUEL), cover 100 children under Jayaprakash Narayan Memorial Trust’s Vidya and Child Programme.
Training Aimed at formal training and development of youth ETASHA, support SGBS Trust, tied up with Hope Foundation
Community Initiatives Focused on sustainable development with economic growth Partnered with Watershed Organisation Trust (WOTR), promote rain water harvesting, blood donation campaigns

Awards and Recognition

2016

Best Performing Branch in Microfinance among Private sector bank by NABARD, 2016 Award for Best Performance in Microfinance[28]
KPMG study of India’s Best Banks Bank of the Year & Best Digital Banking Initiative Award 2016[29]
AIMA Managing India Awards 2015 Business Leader of the Year- Aditya Puri[30]
Finance Asia poll on Asia's Best Companies 2015 Best Managed Public Company-India[31]
Barron's World's 30 Best CEOs - Aditya Puri[32]
J. P Morgan Quality Recognition Award Best in class straight Through Processing Rates[33]

2015

AIMA Managing India Awards 2015 -Business Leader of the Year- Aditya Puri [34][35]
Barron's -World's 30 Best CEOs - Aditya Puri [36][37]
Finance Asia poll on Asia's Best Companies 2015 - Best Managed Public Company-India [36][38]
Forbes Asia Fab 50 Companies List for the 8th year [36][39]
J. P Morgan Quality Recognition Award - Best in class straight Through Processing Rates [40]

2014

Euromoney Best Private Banking Services for Super affluent clients for 5 years in a row at Euromoney Awards [41]
Euromoney Private Banking and Wealth Management Survey 2015 Best Private Banking Services award for Net-worth-specific services category for Super affluent clients (US$1 million to US$5 million). [41]
FE Best Bank Awards Best Bank in the New Private sector [42]
Business Today - KPMG Study 2014 Best Large Bank - Overall [43]
Businessworld-PwC India Best Banks Survey 2014 Best Large Bank [36][44]
Asiamoney FX Poll 2014 - Best Domestic Provider of FX options [36][45]
The Asian Banker Strongest Bank in India in the Asian Banker 500 (AB 500) Strongest Bank by Balance Sheet Ranking 2014 [36][44]
Dun & Bradstreet - Polaris Financial Technology Banking Awards 2014 Best Bank - Managing IT Risk (Large Banks) [36][44]
BrandZ TM Top 50 Most Valuable Indian Brands study by Millward Brown India's Most Valuable Brand [36][46]
Finance Asia Country Awards 2014 and poll on India's Top Companies Best Bank - India [36][36][44][47]

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.[48][49][50] 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.[51] 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.[52][53]

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.[54] 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."[53]

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.[55]

See also

References

[56]

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  2. ^ a b "Balance Sheet of HDFC Bank". moneycontrol.
  3. ^ http://www.exchange4media.com/marketing/hdfc-q3-net-revenues-up-by-20.7-to-9940.7-crore_63122.html
  4. ^ a b c http://www.apnnews.com/2016/01/25/hdfc-bank-financial-results-announced-for-the-quarter-and-nine-months-ended-december-31-2015/
  5. ^ "HDFC Bank Director's Speech". Sharekhan.
  6. ^ "ShareKhan". HDFC Bank numbers.
  7. ^ "Times of India". HDFC Bank opens Branch in Dubai.
  8. ^ "HDFC Bank most valuable brand". Livemint.
  9. ^ "Largest bank by Market capitalization". MoneyControl.
  10. ^ "Most Trusted Bank". Trust Advisory.
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  12. ^ "HDFC Bank numbers". APN News.
  13. ^ "HDFC Bank Ltd". NDTV Profit.
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  15. ^ a b "Maps of India".
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  17. ^ "HDFC Bank unveils debit card, to set up 100 ECD terminals". Indian Express. 17 November 1999. Retrieved 30 November 2013.
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  20. ^ a b "APN News".
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  22. ^ "Been there, Done That". Business Today. Business Today. 18 December 2014.
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  25. ^ "Information Memorandum" (PDF). BSE India.
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  27. ^ "HDFC bank listing & shareholding". Money Control.
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  29. ^ "India's Best Banks- Business Today". www.businesstoday.in. Retrieved 1 March 2016.
  30. ^ SenDhil. "AIMA Managing India Awards 2015 - 6th Edition". www.affairscloud.com. Retrieved 1 March 2016.
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  37. ^ "Awards".
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  50. ^ Ronamai, Raymond (15 March 2013). "India's Private Banks Under Scanner: Is RBI to be Blamed for Money Laundering?". International Business Times. Retrieved 30 November 2013.
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  55. ^ "RBI penalties sting 3 banks in Cobrapost expose". DNA India. 10 June 2013. Retrieved 27 December 2013.
  56. ^ "ICICI, HDFC Bank develop apps for Apple Watch". Free Press Journal.
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