1 - Introduction to Banking Sector 1.

1 Introduction to Banking Industry

The Indian Banking industry, which is governed by the Banking Regulation Act of India, 1949 can be broadly classified into two major categories, non-scheduled banks and scheduled banks. Scheduled banks comprise commercial banks and the co-operative banks. In terms of ownership, commercial banks can be further grouped into nationalized banks, the State Bank of India and its group banks, regional rural banks and private sector banks (the old/ new domestic and foreign). These banks have over 67,000 branches spread across the country. The first phase of financial reforms resulted in the nationalization of 14 major banks in 1969 and resulted in a shift from Class banking to Mass banking. This in turn resulted in a significant growth in the geographical coverage of banks. Every bank had to earmark a minimum percentage of their loan portfolio to sectors identified as priority sectors. The manufacturing sector also grew during the 1970s in protected environs and the banking sector was a critical source. The next wave of reforms saw the nationalization of 6 more commercial banks in 1980. Since then the number of scheduled commercial banks increased four-fold and the number of bank branches increased eight-fold. After the second phase of financial sector reforms and liberalization of the sector in the early nineties, the Public Sector Banks (PSB) s found it extremely difficult to compete with the new private sector banks and the foreign banks. The new private sector banks first made their appearance after the guidelines permitting them were issued in January 1993. Eight new private sector banks are presently in operation. These banks due to their late start have access to state-ofthe-art technology, which in turn helps them to save on manpower costs and provide better services. During the year 2000, the State Bank Of India (SBI) and its 7 associates accounted for a 25 percent share in deposits and 28.1 percent share in credit. The 20 nationalized banks accounted for 53.2 percent of the deposits and 47.5 percent of credit during the same period. The share of foreign banks (numbering 42), regional rural banks and other scheduled commercial banks accounted for 5.7 percent, 3.9 percent and 12.2 percent respectively in deposits and 8.41 percent, 3.14 percent and 12.85 percent respectively in credit during the year 2000.

1.2 Industry Profile

a) Origin and development of the Banking Industry :
Banking in India originated in the last decades of the 18th century. The first banks were The General Bank of India which started in 1786, and the Bank of Hindustan, both of which are now defunct. The oldest bank in existence in India is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras, all three of which were established under charters from the British East India Company. For many years the Presidency banks acted as quasi-central banks, as did their successors. The three banks merged in 1921 to form the Imperial Bank of India, which, upon India's independence, became the State Bank of India. Indian merchants in Calcutta established the Union Bank in 1839, but it failed in 1848 as a consequence of the economic crisis of 1848-49. The Allahabad Bank, established in 1865 and still functioning today, is the oldest Joint Stock bank in India.(Joint Stock Bank: A company that issues stock and requires shareholders to be held liable for the company's debt) It was not the first though. That honor belongs to the Bank of Upper India, which was established in 1863, and which survived until 1913, when it failed, with some of its assets and liabilities being transferred to the Alliance Bank of Simla. When the American Civil War stopped the supply of cotton to Lancashire from the Confederate States, promoters opened banks to finance trading in Indian cotton. With large exposure to speculative ventures, most of the banks opened in India during that period failed. The depositors lost money and lost interest in keeping deposits with banks. Subsequently, banking in India remained the exclusive domain of Europeans for next several decades until the beginning of the 20th century. Foreign banks too started to arrive, particularly in Calcutta, in the 1860s. The Comptore d'Escompte de Paris opened a branch in Calcutta in 1860, and another in Bombay in 1862; branches in Madras and Pondicherry, then a French colony, followed. HSBC established itself in Bengal in 1869. Calcutta was the most active trading port in India, mainly due to the trade of the British Empire, and so became a banking center. The first entirely Indian joint stock bank was the Oudh Commercial Bank, established in 1881 in Faizabad. It failed in 1958. The next was the Punjab National Bank, established in Lahore in 1895, which has survived to the present and is now one of the largest banks in India. Around the turn of the 20th Century, the Indian economy was passing through a relative period of stability. Around five decades had elapsed since the Indian Mutiny, and the social, industrial and other infrastructure had improved. Indians had established small banks, most of which served particular ethnic and religious communities.
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The presidency banks dominated banking in India but there were also some exchange banks and a number of Indian joint stock banks. All these banks operated in different segments of the economy. The exchange banks, mostly owned by Europeans, concentrated on financing foreign trade. Indian joint stock banks were generally under capitalized and lacked the experience and maturity to compete with the presidency and exchange banks. This segmentation let Lord Curzon to observe, "In respect of banking it seems we are behind the times. We are like some old fashioned sailing ship, divided by solid wooden bulkheads into separate and cumbersome compartments." The period between 1906 and 1911, saw the establishment of banks inspired by the Swadeshi movement. The Swadeshi movement inspired local businessmen and political figures to found banks of and for the Indian community. A number of banks established then have survived to the present such as Bank of India, Corporation Bank, Indian Bank, Bank of Baroda, Canara Bank and Central Bank of India. The fervor of Swadeshi movement lead to establishing of many private banks in Dakshina Kannada and Udupi district which were unified earlier and known by the name South Canara ( South Kanara ) district. Four nationalised banks started in this district and also a leading private sector bank. Hence undivided Dakshina Kannada district is known as "Cradle of Indian Banking". The partition of India in 1947 adversely impacted the economies of Punjab and West Bengal, paralyzing banking activities for months. India's independence marked the end of a regime of the Laissez-faire for the Indian banking. The Government of India initiated measures to play an active role in the economic life of the nation, and the Industrial Policy Resolution adopted by the government in 1948 envisaged a mixed economy. This resulted into greater involvement of the state in different segments of the economy including banking and finance. The major steps to regulate banking included:
y

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The Reserve Bank of India, India's central banking authority, was nationalized on January 1, 1949 under the terms of the Reserve Bank of India (Transfer to Public Ownership) Act, 1948 (RBI, 2005b).[Reference www.rbi.org.in] In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India." The Banking Regulation Act also provided that no new bank or branch of an existing bank could be opened without a license from the RBI, and no two banks could have common directors.

Nationalisation

Banks Nationalization in India: Newspaper Clipping, Times of India, July, 20, 1969

Despite the provisions, control and regulations of Reserve Bank of India, banks in India except the State Bank of India or SBI, continued to be owned and operated by private persons. By the 1960s, the Indian banking industry had become an important tool to facilitate the development of the Indian economy. At the same time, it had emerged as a large employer, and a debate had ensued about the nationalization of the banking industry. Indira Gandhi, then Prime Minister of India, expressed the intention of the Government of India in the annual conference of the All India Congress Meeting in a paper entitled "Stray thoughts on Bank Nationalization." The meeting received the paper with enthusiasm. Thereafter, her move was swift and sudden. The Government of India issued an ordinance and nationalized the 14 largest commercial banks with effect from the midnight of July 19, 1969. Jayaprakash Narayan, a national leader of India, described the step as a "masterstroke of political sagacity." Within two weeks of the issue of the ordinance, the Parliament passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it received the presidential approval on 9 August 1969. A second dose of nationalization of 6 more commercial banks followed in 1980. The stated reason for the nationalization was to give the government more control of credit delivery. With the second dose of nationalization, the Government of India controlled around 91% of the banking business of India. Later on, in the year 1993, the government merged New Bank of India with Punjab National Bank. It was the only merger between nationalized banks and
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resulted in the reduction of the number of nationalized banks from 20 to 19. After this, until the 1990s, the nationalized banks grew at a pace of around 4%, closer to the average growth rate of the Indian economy.

Liberalization :
In the early 1990s, the then Narsimha Rao government embarked on a policy of liberalization, licensing a small number of private banks. These came to be known as New Generation techsavvy banks, and included Global Trust Bank (the first of such new generation banks to be set up), which later amalgamated with Oriental Bank of Commerce, Axis Bank(earlier as UTI Bank), ICICI Bank and HDFC Bank. This move, along with the rapid growth in the economy of India, revitalized the banking sector in India, which has seen rapid growth with strong contribution from all the three sectors of banks, namely, government banks, private banks and foreign banks. The next stage for the Indian banking has been set up with the proposed relaxation in the norms for Foreign Direct Investment, where all Foreign Investors in banks may be given voting rights which could exceed the present cap of 10%,at present it has gone up to 74% with some restrictions. The new policy shook the Banking sector in India completely. Bankers, till this time, were used to the 4-6-4 method (Borrow at 4%;Lend at 6%;Go home at 4) of functioning. The new wave ushered in a modern outlook and tech-savvy methods of working for traditional banks. All this led to the retail boom in India. People not just demanded more from their banks but also received more. Currently (2007), banking in India is generally fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. In terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets relative to other banks in comparable economies in its region. The Reserve Bank of India is an autonomous body, with minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage volatility but without any fixed exchange rate-and this has mostly been true. With the growth in the Indian economy expected to be strong for quite some time-especially in its services sector-the demand for banking services, especially retail banking, mortgages and investment services are expected to be strong. One may also expect M&As, takeovers, and asset sales. In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has been allowed to hold more than 5% in a private sector bank since the RBI announced norms in 2005 that any stake exceeding 5% in the private sector banks would need to be vetted by them.

1.2, a) Growth and Present Status Of The Banking Industry

It is true that banks in India are facing difficulty in getting deposits. There are many reasons behind this problem. Two points for what was happening in banking and investment sector in the last 5 years 1. Increased consumerism: If we look at the consumption pattern in last 5 years, people were moving from being savers to consumers, i.e., more emphasis on benefits gained today rather than gains received through savings in future, this changing attitude is one of the reasons for higher growth in lending compared to deposits. 2. Alternatives and risks: People were looking for more alternatives like mutual funds, different insurance schemes, stock market, etc. People were moving to these products with higher return expectations. These instruments also have higher risk and increased income level people who deposit high amounts of money into banks were ready to take these high-risk alternatives. But now the situation will be slightly better for banking system in India because investors are losing a lot of wealth in stock markets and mutual funds. People will realize the importance of safer investment vehicle and will start diversifying their portfolio with increased exposure to safer instruments like bank deposits. The banks in India generate their funds from two types of sources: Long-Term Sources: 1. Tier one and Tier two Capital in the form of equity/subordinate debts/debentures/preference shares. 2. Internal accrual generated out of profits. 3. Long-term fixed deposits generated from public and corporate clients, financial institutions, and mutual funds, etc. 4. Long-term borrowings from financial institutions like NABARD/SIDBI. Short-Term Sources: 1. Call money market, i.e., funds generated among interbanking transactions where there is online trading of money between bankers. 2. Fixed deposits generated from public and corporate clients, FIs, and MFs, etc. 3. Market-linked borrowings from RBI. 4. Sale of liquid certificate deposits in the open market. 5. Borrowing from RBI under Repo (Repurchase option). 6. Short and medium-term fixed deposits generated from public and corporate clients, mutual funds, and financial institutions, etc. 7. Floating in current and saving accounts. 8. Short-term borrowings from FIs by way of rated papers placed, etc.

Current Scenario:
The industry is currently in a transition phase. On the one hand, the PSBs, which are the mainstay of the Indian Banking system are in the process of shedding their flab in terms of excessive manpower, excessive non Performing Assets (Npas) and excessive governmental equity, while on the other hand the private sector banks are consolidating themselves through mergers and acquisitions. PSBs, which currently account for more than 78 percent of total banking industry assets are saddled with NPAs (a mind-boggling Rs 830 billion in 2000), falling revenues from traditional sources, lack of modern technology and a massive workforce while the new private sector banks are forging ahead and rewriting the traditional banking business model by way of their sheer innovation and service. The PSBs are of course currently working out challenging strategies even as 20 percent of their massive employee strength has dwindled in the wake of the successful Voluntary Retirement Schemes (VRS) schemes. The private players however cannot match the PSBs great reach, great size and access to low cost deposits. Therefore one of the means for them to combat the PSBs has been through the merger and acquisition (M& A) route. Over the last two years, the industry has witnessed several such instances. For instance, Hdfc Banks merger with Times Bank Icici Banks acquisition of ITC Classic, Anagram Finance and Bank of Madura. Centurion Bank, Indusind Bank, Bank of Punjab, Vysya Bank are said to be on the lookout. The UTI bank- Global Trust Bank merger however opened a pandoras box and brought about the realization that all was not well in the functioning of many of the private sector banks. Private sector Banks have pioneered internet banking, phone banking, anywhere banking, mobile banking, debit cards, Automatic Teller Machines (ATMs) and combined various other services and integrated them into the mainstream banking arena, while the PSBs are still grappling with disgruntled employees in the aftermath of successful VRS schemes. Also, following Indias commitment to the W To agreement in respect of the services sector, foreign banks, including both new and the existing ones, have been permitted to open up to 12 branches a year with effect from 1998-99 as against the earlier stipulation of 8 branches. Talks of government diluting their equity from 51 percent to 33 percent in November 2000 has also opened up a new opportunity for the takeover of even the PSBs. The FDI rules being more rationalized in Q1FY02 may also pave the way for foreign banks taking the M& A route to acquire willing Indian partners. Meanwhile the economic and corporate sector slowdown has led to an increasing number of banks focusing on the retail segment. Many of them are also entering the new vistas of Insurance. Banks with their phenomenal reach and a regular interface with the retail investor are the best placed to enter into the insurance sector. Banks in India have been allowed to provide fee-based insurance services without risk participation, invest in an insurance company for providing infrastructure and services support and set up of a separate joint-venture insurance company with risk participation.

Aggregate Performance of the Banking Industry

Aggregate deposits of scheduled commercial banks increased at a compounded annual average growth rate (Cagr) of 17.8 percent during 1969-99, while bank credit expanded at a Cagr of 16.3 percent per annum. Banks investments in government and other approved securities recorded a Cagr of 18.8 percent per annum during the same period. In FY01 the economic slowdown resulted in a Gross Domestic Product (GDP) growth of only 6.0 percent as against the previous years 6.4 percent. The WPI Index (a measure of inflation) increased by 7.1 percent as against 3.3 percent in FY00. Similarly, money supply (M3) grew by around 16.2 percent as against 14.6 percent a year ago. The growth in aggregate deposits of the scheduled commercial banks at 15.4 percent in FY01 percent was lower than that of 19.3 percent in the previous year, while the growth in credit by SCBs slowed down to 15.6 percent in FY01 against 23 percent a year ago. The industrial slowdown also affected the earnings of listed banks. The net profits of 20 listed banks dropped by 34.43 percent in the quarter ended March 2001. Net profits grew by 40.75 percent in the first quarter of 2000-2001, but dropped to 4.56 percent in the fourth quarter of 2000-2001. On the Capital Adequacy Ratio (CAR) front while most banks managed to fulfill the norms, it was a feat achieved with its own share of difficulties. The CAR, which at present is 9.0 percent, is likely to be hiked to 12.0 percent by the year 2004 based on the Basle Committee recommendations. Any bank that wishes to grow its assets needs to also shore up its capital at the same time so that its capital as a percentage of the risk-weighted assets is maintained at the stipulated rate. While the IPO route was a much-fancied one in the early 90s, the current scenario doesnt look too attractive for bank majors. Consequently, banks have been forced to explore other avenues to shore up their capital base. While some are wooing foreign partners to add to the capital others are employing the M& A route. Many are also going in for right issues at prices considerably lower than the market prices to woo the investors.

1.3. c) Future of the Banking Industry

Vision of Banks in India
The banking scenario in India has already gained all the momentum, with the domestic and international banks gathering pace. The focus of all banks in India has shifted their approach to 'cost', determined by revenue minus profit. This means that all the resources should be used efficiently to better the productivity and ensure a win-win situation. To survive in the long run, it is essential to focus on cost saving. Previously, banks focused on the 'revenue' model which is equal to cost plus profit. Post the banking reforms, banks shifted their approach to the 'profit' model, which meant that banks aimed at higher profit maximization.

Focus of banks in India

The banking industry is slated for growth in future with a more qualitative rather than quantitative approach. The total assets of all scheduled commercial banks by end-March 2010 is projected to touch Rs 40,90,000 crore. This is going to comprise around 65% of GDP at current market prices as compared to 67% in 2002-03. The bank's assets are estimated to grow at an annual composite rate of growth of 13.4% during the rest of the decade as against 16.7% between 1994-95 and 2002-03. Barring the asset side, on the liability perspective, there will be huge additions to the capital base and reserves. People will rely more on borrowed funds, pace of deposit growth slowing down side by side. However, advances and investments would not see a healthy growth rate.

Consolidation of Banks in India

Would the banking industry in India get opened up for more international competition? India would see a large number of global banks controlling huge stakes of the banking entities in the country. The overseas banking units would bring along with it capital, technology, and management skills. This would lead to higher competition in the banking frontier and ensure greater efficiency. The FDI norms in the banking sector would give more leverage to the Indian banks. Thus, a consolidation phase in the banking industry in India is expected in the near future with mergers and acquisitions gathering more pace. One might also see mergers between public sector banks or public sector banks and private banks. Credit cards, insurance are the next best strategic places where alliances can be formed.

Future challenges of Banks in India

The Indian banks are hopeful of becoming a global brand as they are the major source of financial sector revenue and profit growth. The financial services penetration in India continues to be healthy, thus the banking industry is also not far behind. As a result of this, the profit for the Indian banking industry will surely surge ahead. The profit pool of the Indian banking industry is probable to augment from US$ 4.8 billion in 2005 to US$ 20 billion in 2010 and further to US$ 40 billion by 2015. This growth and expansion pace would be driven by the chunk of middle class population. The increase in the number of private banks, the domestic credit market of India is estimated to grow from US$ 0.4 trillion in 2004 to US$ 23 trillion by 2050. Third largest banking hub of the globe by 2040 - is that vision too far away?

Origin of the Organisation(Company History) - HDFC Bank

1994 - The Bank was Incorporated on 30th August. A new private sector Bank promoted by housing Development Corporation Ltd. (HDFC), a premier housing finance company. The bank is the first of its kind to receive an in-principle approval from the RBI for establishment of a bank in the private sector. Certificate of Commencement of Business was received on 10th October 1994 from RBI. - The Bank transacts both traditional commercial banking as well as investment banking. HDFC, the promoter of the bank has entered into an agreement with National Westminister Bank Pc. and its subsidiaries (Natwest Group) for subscribing 20% of the banks issued capital and providing technical assistance in relation to the banks proposed banking business. 1995 - 70 No. of equity shares issued to subscribers to the Memorandum & Articles of Association on 30th August 1994. On the same date 500,00,000 equity shares were allotted to HDFC promoters. 509,20,000 shares were allotted to HDFC Employees Welfare Trust and HDFC Bank Employees Welfare Trust on 22nd December, 1994. - On 16.1.1995, 90,79,930 No. of equity shares were allotted to Jarrington Pte. Ltd. Another 400,00,000 equity shares were allotted on private placement basis to Natwest Group on 9.5.1995. 500,00,000 shares were allotted to the public on 9.5.95 (all were taken up). - The Bank opened its first branch in Ramon House at Churchgate, Mumbai on January 16th. - The Bank has created an efficient operating system using well

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tested state-of-the-art software. 1996 - HDFC Bank has entered the banking consortia of over 50 corporates, including some leading multinational companies, flagship companies of local business houses and strong public sector companies. - HDFC Bank has set up a state-of-the-art dealing room to handle all transactions possible in Indian financial markets. - The Certificates of Deposits were awarded a PP1+ rating which is the highest rating for short term instruments indicating superior capacity for repayment. 1997 - The bank is one of the largest mobilisers of retail deposits through its network of 20 branches. Its credit deposits ratio was 53.8%. - The bank has set up a ultra-modern hub at Powai in Mumbai where the bank's central computer is housed. This hub housed in 35,000 square feet of space, houses data of all the branches and facilitates the introduction of new products and services. - HDFC has installed state-of-the-art systems to facilitate inter-connectivity between branches and link up with on line system. - The bank has also recently signed up as a depository participant, under the newly set up NSDL, wherein the members clearing accounts settlement for dematerialised shares can be done through the bank. - HDFC Bank, one of the nine new-generation private sector banks, has planned to set up an all-India on-line automated teller machine (ATM) network. - HDFC Bank proposed to launch tele-banking for the first time in June in Mumbai at its Chandiveli branch. - HDFC Bank has drawn up plans to become a niche player in corporate banking by sticking to top-rung corporates. - HDFC Bank has become the first private sector bank to conclude a structured interest rate option deal. - HDFC Bank has launched its Versova branch, the 11th branch in Mumbai.

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- HDFC Bank, as part of its expansion plans in the South, has opened another branch in Chennai. - HDFC Bank has entered into strategic alliances with 10 overseas banks to provide customers with a wide range of derivatives including interest rate and foreign currency swaps. - HDFC Bank on October 14 introduced ATMs that converse in a regional language. - HDFC Bank has introduced the Freedom Account for the average retail customer located in the major metros as a means to wean away the middle-income market from nationalised banks. - HDFC Bank has launched an account in all its 28 branches across India that seeks to free depositors from minimum balance requirement, for the first time in the country. - HDFC has introduced a new loan product for the payment of betterment fees announced by the Bangalore Mahanagar Palike. - HDFC Bank is all set to launch its debit card by April 1998. 1998 - HDFC Bank has tied up with the Ahmedabad Stock Exchange (ASE) to act as its clearing bank. - HDFC Bank proposes to strengthen its branch network in Calcutta with the addition of two new branches in the first quarter of the next fiscal. - HDFC Bank has signed an agreement with the National Stock Exchange (NSE) which will give it a second charge over the brokers deposit for providing loan against share facility to NSE brokers. - The bank has also entered into a similar understanding with the Bombay Stock Exchange (BSE) whereby the bourse will provide support for recovery of money against the card for loan against share facility. - The bank has also entered into `Cirrus' arrangements by which all master card holders across the globe will be able to transact at HDFC Bank in India. - The bank will also provide phone-banking facility in Bangalore. HDFC has tied up with Visa International to offer its Debit Card.

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- HDFC Bank Ltd has entered into a memorandum of understanding for a strategic business collaboration with Chase Manhattan Bank. - HDFC Bank has become the first bank in India to link up its automated teller machine (ATM) network with all the three major payment systems world-wide. - HDFC Bank will be the first bank in the Asia-Pacific region to connect the American Express (Amex) payment system. - The HDFC Bank is expanding its ATM network to connect to American Express Interchange based in Phoenix, Arizona, USA. With this connectivity, HDFC Bank has become the first bank in the Asia-pacific region to connect to the Amex Interchange. - HDFC Bank was the first to sign up with AMEX in December of 1998. - The Bank has tied up with ITC Threadneedle Mutual Fund to provide its investors with the High Interest Fund (HIF), a facility to encash their units through the bank's Automated Teller Machines in addition to a cheque book facility also to be provided by the bank. - Sony India Ltd (SIL) has joined hands with HDFC Bank to work out an innovative car finance package under which a sony car audio system would be installed to a new car for no additional upfront cash outflow. - The bank has decided to issue 1,33,10,000 equity shares of Rs. 10 each to HDFC and a wholly-owned subsidiary of it at a price of Rs. 94 per share. - The bank will also issue 13,70,000 equity shares to India Private Equity Fund and 51,20,000 shares to Indocean Financial Holding, the two equity funds controlled by Chase Manhattan Bank. - HDFC Bank, has tied up with BPL Ltd to offer Internet-enabled supply-chain management and business-to-consumer (B2C) e-commerce services to corporates. - Hutchison Max Telecom and HDFC Bank introduced the country's first-ever mobile-banking services in the city. 2000 - HDFC Bank also signed a memorandum of understanding with Singapore Telecom's e-commerce arm Sesami.Com Pvt Ltd. - The Bank latter also entered into a partnership agreement with

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National Computer Systems, the e-commerce unit of Singtel. - A new company called SESAMi.com (India) has been formed by a strategic alliance between HDFC Bank and Singapore Telecom's e-commerce company SESAMi.com, to offer e-commerce solutions for the Indian market. - HDFC Bank has a tie-up with Maxtouch for giving the facility to the latter's customers in Mumbai. This is the first and only service of this sort in the country, he said. - HDFC Bank is also launching an online electronic banking solution called Enet which will allow corporates to access their accounts over the net and carry out trade related transactions and cash management functions. - HDFC Bank entered into a tie-up with Telco by which the bank would provide preferential financing options for Tata's range of passenger cars including the Indica, Sumo, Safari, Estate and Sierra. - HDFC Bank allotted 1.98 crore shares of Rs 10 each at an issue price of Rs 94 per share to promoters and strategic investors on March 29. - HDFC Bank is also set to become the first bank in the country to offer wireless application protocol (WAP) services to customers. - SkyCell Communications Ltd, one of the two cellular service providers in Chennai, has launched `Sky Banking', for which the company has tied up with ICICI Bank and HDFC Bank. - The bank has tied up with 12 utility companies nationwide including BSES, MSEB, BEST, Orange, BPL and MTNL. - The Bank has tied up with financial portals, e-brokerages and the National Stock Exchange to enable broker payments for e-broking ventures. - The Bank has set up 100 new electronic data capture (EDC) terminals in Mumbai. - HDFC Bank has launched its first B2C payment gateway which allows Visa and MasterCard credit card-holders to do transaction online and realtime. - CYBERITMALL.COM has joined hands with HDFC Bank to provide VISA/MasterCard users with an online payment gateway solution to enable them to have a secure eshopping experience.

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- HDFC Bank plans to extend its mobilephone banking services introduced in select metros to mobilephone broking when it introduces its Internet on-line trading in July. - HDFC Bank and portal clickforsteel.com have signed a memorandum of understanding for offering online credit and services to facilitate `post transaction' activities through the portal's `allied services providers' programme. - Indianfoline.com signed an agreement with HDFC bank for the use of payment gateway to enable online financial transactions. - HDFC Bank, in association with cellular service provider Orange, has launched the entire range of mobile banking services and mobile commerce services using wireless application protocol (WAP) technology. - The Company has introduced a new scheme whereby it will provide loans to individuals for payment of self assessment tax on their properties in Bangalore. - The Foreign Investment Promotion Board has cleared the proposal of the HDFC Group to enter into a joint venture with Singapore Telecom's e-commerce company for providing a comprehensive range of business-to-business e-commerce solutions to companies in India. - The Company proposes to pick up an equity stake in Softcell Trade and Technologies Ltd., a Mumbai-based software company. - BPL Mobile has tied up with HDFC Bank to offer Internet banking through the mobile phone. - HDFC Bank launched `eInstant Car Loans' a new scheme for offering customers a range of net-enabled loan products. - HDFC Bank launched depository services on the net. - HDFC Bank tied up with NSE.IT, a wholly owned subsidiary of the National Stock Exchange, for providing payment gateway services for the latter's Internet trading operations. - HDFC Bank has been identified as the best domestic commercial bank for the second consecutive year by FinanceAsia.com, which provides a network for financial decision makers. - The Mumbai-based Geojit Securities Ltd. has tied up with HDFC Bank for Internet trading of shares. - Calcutta's cellular services provider Modi Telstra, and HDFC Bank

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have entered into a collaboration to provide mobile commerce in Calcutta. - HDFC Bank has got the Kerala-based Nedungadi Bank as its first customer for its new joint venture company with I-Flex Solutions. - HDFC Bank has set a target of attaining a business of over Rs 15,000 crore this fiscal mainly through expansion and new product launches, including a credit card. - HDFC Bank, in association with Tata Cellular, has launched Mobile Commerce Service, for customers in Hyderabad and Vishakaptnam. - HDFC Bank has tied up with about 25 equity brokerages for enabling third party transfer of funds and securities through its business-to-business portal -- `e-Net'. - The Bank has entered into an alliance with Deloitte Haskins and Sells, a member firm of Deloitte and Touch, to offer banking services to its non-resident Indian customers. - HDFC Bank has launched its 123rd outlet at Delhi Stock Exchange building at Asaf Ali Road. - The Bank proposes to acquire up to 24.5 per cent stake in the MIEL e-Security Pvt. Ltd., which is engaged in the business of developing and marketing of security products and services for a range of e-commerce and enterprises security applications. - The Bank has tied up with Rajan Raheja-owned Hathway for providing banking at home as part of the Net-over-cable initiative of the latter in Mumbai. - HDFC Bank launched its on-line bill payment facility in alliance with the Maharashtra State Electricity Board has also begun to offer bridge loans against fixed deposits of parent Housing Development Finance Corporation the financial institution. - HDFC Bank has tied up with portal brainvisa.com to retail education loans to students. - The Gujarat Cellular operator Fascel, has signed up with the HDFC Bank to introduce mobile commerce for the first time in the State. - HDFC Bank has tied up with BPL Mobile for mobile commerce facility. - CricketNext.com, a sports e-commerce site has tied up with HDFC Bank to provide an on-line payment gateways and marketing opportunities for

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a wide range of cricket sports gear on its on-line shop BatNext. - Singapore-based Growasia.com has entered into an understanding with HDFC Bank and credit rating agency Icra, for picking up equity in the company's Indian subsidiary Gasia.com. - The Bank has launched `Freedom - The e-Age Savings Account' for cellular phone users. - Spice Cell has tied up with Citibank N A, HDFC Bank and ICICI Bank for mobile bill settlements. - HDFC Bank and Cosmos Bank launched a co-branded ATM card. - The Chatterjee Group-promoted Captech Online Ltd. has signed memorandum of understanding with HDFC Bank and UTI Bank for setting up a payment gateway for its debt negotiation platform, Riskxpress.com. - HDFC Securities Ltd., promoted by the HDFC group with equity participation from the Housing Development Finance Corporation Ltd., HDFC Bank and Chase Capital Partners, has launched its brokerage services for retail investors in the Capital. - The HDFC Bank and Airtel launched their mobile-banking service through WAP in Delhi. - HDFC Bank has launched wireless application protocol-based mobile-banking in Coimbatore and Trichy in association with Aircel. 2001 - The Bank has opened its first branch in Aurangabad. - HDFC Standard Life Insurance has entered into a memorandum of understanding with the Chennai-based Indian Bank. - The Bank has launched the international Maestro debit card in association with Master Card. - HDFC Bank will launch its credit card in June through link-ups with MasterCard and Visa. - LTtrade.com has entered into a strategic tie-up with HDFC Bank to provide Net banking services to online investors. - Standard Chartered Bank, HDFC Bank and Bharat Petroleum Corporation have joined the eCash Forum which has been set up by the Smart Card Forum of India. - HDFC Bank has launched a new campaign for its eage savings account.

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- HDFC Bank entered into a strategic tie-up with Tally Solutions Pvt. Ltd. to offer online real time accounting services to small and medium enterprises. - The Bank has opened four ATMs outlets in Bangalore at Coles Road, RT Nagar, Rajaji Nagar and Jaya Nagar on March 26. - HDFC Standard Life Insurance has launched a `Development Insurance Plan' a low cost life insurance product developed specifically to meet the needs of economically weaker sections. - Two Directors, Mr. S.S. Thakur and Mr. Amit Judge, have resigned from the board of the bank effective from March 30. - HDFC Bank files with US regulators to list more than 11 million American Depositary Shares on the New York Stock Exchange. 2002 - HDFC Bank unveiled a new online account aggregation service `OneView'. - HDFC launched 'One View' service to customers - HDFC Bank launched its 9th branch in Karnataka. - HDFC opens its branch in Mangalore. - HDFC Bank unveils Silver card in Hyderabad. - HDFC Bank opens first overseas representative office. - HDFC Bank unveils gold card - Mediclaim facilities to HDFC Bank gold cardholders. - HDFC Bank Ltd has informed BSE that Mr Deepak Satwalekar has submitted his resignation as Director of the Bank. The Board of Directors has accepted the same. The Board of Directors has co-opted Mrs Renu Karnad as Additional Director of the Bank. - Mrs. Renu Karnad has been co-opted as an Additional Director of the Bank. Mrs Karnad shall represent the promoters of the bank i.e. HDFC Ltd. Also Mr. Deepak Satwalekar, Managing Director of HDFC Standard Life Insurance Company Ltd, has been on the Board of the Bank as nominee of HDFC Ltd since September 12, 1994 and shall complete the period of 8 yrs before the next scheduled board meeting. In view of the provisions of the Banking Regulation Act, 1949, Mr. Satwalekar has submitted his resignation as Director of the Bank and the Board has accepted the same. - HDFC Bank launched new products to its wealth management programme

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to increase its customer base. The bank introduced a non-interactive product named Financial Planner, which would be available for all its customers for an annual fee starting from Rs 10,000. The bank is offering fee based advisory programme to the mass affluent segment, which was earlier offered to high net worth customers. The wealth management programme would cater to individual needs taking into account various factors such as customer's age, financial goals and risk profile, which includes equity, MFs and debt instruments such as RBI Relief Bonds. - Orange JV with HDFC Bank. 2003 - HDFC Bank unveils resident foreign currency account. - HDFC Bank unveils co-branded credit card with e-Seva. - The Board of Directors of HDFC Bank Ltd at their meeting held on January 15, 2003 approved the appointment of Mr. Arvind Pande as an Additional Director pursuant to section 260 of the Companies Act, 1956. - EPFO JV with HDFC Bank for its pension distribution. - HDFC enters into agreement with HDFC Bank to source housing loans. - HDFC Bank, IRCTC in tie up for online railway booking. - HDFC Bank inks pact with ANB for remittance service - HDFC Bank introduces 'HDFC Bank Health Plus Credit Card'. - Uma Krishnan resigns HDFC Bank as country head. - Escotel ties up with HDFC Bank for Global Debit Card. - HDFC Bank launches India's first mobile payment solution. - HDFC Bank's debt programme of Rs 400-crore has received triple A (ind) rating from CREDIT rating agency FITCH. -Mumbai - HDFC Bank in collaboration with Tally Solutions is planning to launch electronic data interchange (EDI) system for small and medium enterprises (SMEs). -Warburg Pincus sells 2% stake in HDFC for Rs 235 cr - HDFC Bank began selling home loans of its promoter Housing Development Finance Corporation (HDFC). -Board approved to allot 4,16,400 equity shares to the employees of the Bank under the Employee Stock Option Scheme 2004 -Mr Ranjan Kapur & Mr Bobby Parikh appointed as Additional Directors

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-NMCE inks pact with HDFC Bank for warehouse receipts - HDFC Bank has entered into an alliance with Clearing Corporation of India Ltd (CCIL). The tie-up offers the latter's collateral borrowing and lending obligation (CBLO) product to cooperative banks that are not direct members of the negotiated dealing system (NDS). -HDFC Bank repurchases HDFC loans worth Rs 208 cr -Launches Quickremit, a unique online service that enables NRIs in the US to send money to their relatives in India from the comfort of their homes. -Andhra Bank has entered into an alliance with HDFC Bank for sharing its network of automated teller machines (ATMs). On March 29, 2004 - HDFC Bank and Bahraini Saudi Bank (BSB) have announced an alliance to cater to service the needs of the non-resident Indians (NRIs) in Bahrain. - HDFC bank Ltd has informed that Dr (Mrs) Amla Samanta has ceased to be a director of the Bank wef April 25, 2004. - HDFC Bank launches new scheme for Maruti 800 buyers, providing 85 per cent finance on the on-road price of the car for seven years. -HDFC Bank wins Asiamoney award for Best Domestic Bank -HDFC Bank managing director Aditya Puri has been awarded the management man of the year by the Bombay Management Association (BMA) -HDFC Bank has entered into an agreement with Shrachi Securities Ltd, the flagship company of the Kolkata-based Rs 300-crore Shrachi Group, for financing of multi-utility vehicles all over India -HDFC Bank has launched an online bill payment facility for its customers who are also subscribers to Tata Teleservices -HDFC Bank join hands with NCR Corporation to offer managed ATM services - IKF Finance Ltd has entered in to a Joint Lending Arrangement with HDFC Bank Ltd 2005 -TMB forges alliance with HDFC Bank -HDFC Bank inaugurates first ATM in Hotel - HDFC Bank ties up with the International Bank of Qatar (IBQ) to launch banking services in Qatar. - HDFC Bank launches loyalty rewards programme for its debit and credit cardholders under the name InstaWonderz.

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-HDFC Bank along with MasterCard International launched credit card targeted at small and medium-sized enterprises -HDFC Bank has tied up with US-based WL Ross and company LLC for investing in corporate restructuring -HDFC Bank unveils credit card for farmers 2006 -HDFC sets up two more branches in AP - Osim to join hands with HDFC Bank for consumer loans - HDFC Bank inaugurates VbV facility for online shopping - HDFC sets up two more branches in AP 2007 -HDFC Bank has signed an agreement with Tata Pipes to offer credit facilities to farmers across the country. -Hdfc Bank Ltd has appointed Mr. Pandit Palande as an additional Director of the Bank at the Board Meeting held today i.e. on 24th April 2007. - HDFC Bank Ltd has informed that the Board of Directors of the Bank at its meeting held on October 12, 2007, has been appointed Mr. Paresh Sukthankar & Mr. Harish Engineer as Executive Directors on the Board of Directors of the bank. Mr. Sukthankar & Mr. Engineer have been senior employees of the Bank since 1994 and have held various positions of responsibility. The above appointments as Executive Directors of the Bank are subject to approval of Reserve Bank of India and of the Bank's shareholders. 2008 - HDFC Bank Ties Up With Postal Department, Extends Rural Reach - HDFC Bank Wins Nasscom IT User Award The Year' - HDFC Bank Opens Its First Overseas Branch In Bahrain - HDFC Bank and Centurion Bank of Punjab merger at share swap ratio of 1:29 - HDFC Bank Launches Indias First Rural Banking BPO At Tirupathi - HDFC Bank Launches Indias First Online Market Linkage Programme For Self Help Groups 2009 - HDFC Bank Bags Asiamoney Award for the Best Domestic Bank - HDFC Bank offers electronic payment collection facility to Guruvayoor Devaswom.

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- HDFC Bank launches Meritus Scholarship Programme. - The Asian Banker declares HDFC Bank the Best Retail Bank 2010 - With a view to attract long term deposits and prevent premature withdrawal when the interest rates peak, HDFC, the housing finance major, has decided to pay variable interest rate on recurring deposits. - HDFC Bank on Feb 19 increased the fixed deposit rates by up to 150 basis points across maturities, a move that follows the Cash Reserve Ratio hike of 75 basis points by the Reserve Bank of India last month.

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