Corporate Governance

HDFC Bank recognizes the importance of good corporate governance, which is generally accepted as a key factor in attaining fairness for all stakeholders and achieving organizational efficiency. This Corporate Governance Policy, therefore, is established to provide a direction and framework for managing and monitoring the bank in accordance with the principles of good corporate governance.

Code of Corporate Governance

The Bank believes in adopting and adhering to the best recognised corporate governance practices and continuously benchmarking itself against each such practice. The Bank understands and respects its fiduciary role and responsibility to shareholders and strives hard to meet their expectations. The Bank believes that best board practices, transparent disclosures and shareholder empowerment are necessary for creating shareholder value. The Bank has infused the philosophy of corporate governance into all its activities. The philosophy on corporate governance is an important tool for shareholder protection and maximization of their long term values. The cardinal principles such as independence, accountability, responsibility, transparency, fair and timely disclosures, credibility, etc. serve as the means for implementing the philosophy of corporate governance in letter and spirit.

Corporate Governance Rating

The bank was amongst the first four companies, which subjected itself to a Corporate Governance and Value Creation (GVC) rating by the rating agency, The Credit Rating Information Services of India Limited (CRISIL). The rating provides an independent assessment of an entity's current performance and an expectation on its "balanced value creation and corporate governance practices" in future. The bank was assigned a 'CRISIL GVC Level 1' rating in January 2007 which indicates that the bank's capability with respect to wealth creation for all its stakeholders while adopting sound corporate governance practices is the highest.

Composition of the Board

The Composition of the Board of Directors of the Bank is governed by the Companies Act, 1956, the Banking Regulation Act, 1949 and the listing requirements of the Indian Stock Exchanges where the securities issued by the Bank are listed. The Board has a strength of eleven (11) Directors as on March 31, 2010. All Directors other than Mr. Aditya Puri, Mr. Harish Engineer and Mr. Paresh Sukthankar are non-executive directors. The Bank has five independent directors and six non-independent directors. The Board consists of eminent persons with considerable professional expertise and experience in banking, finance, agriculture, small scale industries and other related fields. None of the Directors on the Board is a member of more than ten (10) Committees and Chairman of more than five (5) Committees across all the companies in which he/she is a Director. All the Directors have made necessary disclosures regarding Committee positions occupied by them in other companies.
1

Mr. Jagdish Capoor, Mr. Keki Mistry, Mrs. Renu Karnad, Mr. Aditya Puri, Mr. Harish Engineer and Mr. Paresh Sukthankar are non-independent Directors on the Board. Mr. Arvind Pande, Mr. Ashim Samanta*, Mr. Gautam Divan, Mr. C. M. Vasudev and Dr. Pandit Palande are independent directors on the Board. Mr. Keki Mistry and Mrs. Renu Karnad represent HDFC Limited on the Board of the Bank. The Bank has not entered into any materially significant transactions during the year, which could have a potential conflict of interest between the Bank and its promoters, directors, management and/or their relatives, etc. other than the transactions entered into in the normal course of business. The Senior Management have made disclosures to the Board confirming that there are no material, financial and/or commercial transactions between them and the Bank which could have potential conflict of interest with the Bank at large. None of the directors are related to each other. *Mr. Ashiim Samanta has ceased to be a Director w.e.f. 19th November 2012 on completing the permitted tenure of 8 years as a Director of the Bank.

Directors

Mr. C M Vasudev Mr. Aditya Puri Mr. Keki Mistry Mrs. Renu Karnad Dr. Pandit Palande Mr. Partho Datta Mr. Bobby Parikh Mr. A. N. Roy Mr. Harish Engineer Mr. Paresh Sukthankar

Board Committees
The The Board's Committees are as follows: Audit and Compliance Committee Compensation Committee Investor Grievance (Share) Committee Risk Policy and Monitoring Committee Credit Approval Committee Premises Committee Nomination Committee Fraud Monitoring Committee Customer Service Committee

Audit and Compliance Committee The Audit and Compliance Committee of the Bank comprises Mr. C. M. Vasudev, Mr. Ashim Samanta, Dr. Pandit Palande, Mr. Bobby Parikh and Mr. Partho Datta. The Committee is chaired by Mr. C. M. Vasudev. Mr. Sanjay Dongre, the Company Secretary of the Bank, acts as the secretary of the Committee. The terms of reference of the Audit Committee are in accordance with Clause 49 of the Listing Agreement entered into with the Stock Exchanges in India and include the following: Overseeing the Bank's financial reporting process and ensuring correct, adequate and credible disclosure of financial information;