HDFC Bank Limited (also known as HDFC) is an Indian banking and financial services company headquartered in Mumbai. As of May 2024, it is the largest private sector bank in India by assets and the 10th largest bank in the world by market capitalization. The Reserve Bank of India (RBI) has identified HDFC Bank, State Bank of India and ICICI Bank as Domestic Systemically Important Banks (D-SIB), which are often referred to as "too big to fail" banks.

With a market capitalization of $145 billion as of April 2024, HDFC Bank is the third largest company on the Indian Stock Exchange. Following the acquisition of its parent company, HDFC, it is also the 16th largest employer in India with over 173,000 employees.

History

HDFC Bank was established in 1994 as a subsidiary of HDFC Limited, which received "in principle" approval from the Reserve Bank of India to set up a bank in the private sector as part of its liberalization of the Indian banking sector. The bank commenced operations in January 1995 with its registered office in Mumbai. Its first corporate office and full-service branch at Sandoz House in Worli was inaugurated by the then Union Finance Minister, Manmohan Singh.

In February 2000, Time Bank merged with HDFC Bank, the first voluntary merger of a bank in India. Time Bank was founded by Time Group, India's largest media conglomerate.

In July 2001, HDFC Bank's ADS went public following its initial public offering on the New York Stock Exchange.

In 2008, HDFC Bank acquired Punjab Centurion Bank (CBoP) for 95.10 billion rupees (2.19 billion USD), reportedly the largest acquisition in the Indian financial sector at the time.

In 2021, the bank acquired a 9.99% stake in Ferbine, an entity promoted by the Tata Group, to operate an umbrella entity for a pan-India retail payment system similar to the National Payments Corporation of India.

HDFC LTD - HDFC Bank merger

On April 4, 2022, HDFC Ltd announced that it would merge with HDFC Bank in the largest merger and acquisition deal ever in India. As part of the merger, HDFC Ltd transferred its portfolio of home loans to HDFC Bank, while the bank offered HDFC Ltd's depositors the option to withdraw their funds or renew their deposits at the interest rates offered by the bank at that time.

On July 1, 2023, the merger of HDFC Ltd and HDFC Bank was completed. As a result, HDFC Bank has a market capitalization of $154 billion, making it the seventh most valuable bank in the world. HDFC Bank has also become one of the top 100 banking companies in the world by total assets.

The merged entity has 120 million customer base, which is larger than the population of Germany. The merger has resulted in a significant increase in the number of employees of the bank, with a total of 177,000 employees. The merged entity becomes the second largest bank in India with assets after State Bank of India. The number of branches has increased to 8,300.

The shares of HDFC Ltd were delisted, and shareholders received 42 shares of HDFC Bank for every 25 shares of HDFC Ltd, resulting in an increase in HDFC Bank's share capital.

Operation

HDFC Bank's branches in Hyderabad

As of March 2024, HDFC Bank's distribution network consisted of 8,735 branches and 20,938 ATMs (cash recycling machines; cash deposits and withdrawals) distributed across 3,836 cities and villages. HDFC Ltd.'s distribution network, consisting of 737 locations, including 214 offices of HDFC Private Sales Limited, has been integrated into the bank's network.

HDFC Bank is the only private bank operating on the federal territory of the Lakshah Islands after opening a branch on Kavarati Island.

Products & Services

HDFC Bank offers multiple products and services, including wholesale banking, retail banking, treasury, car loans, two-wheeler loans, personal loans, real estate loans, consumer durables loans, lifestyle loans, and credit cards. In addition to this, various digital products are PayZapp and SmartBUY. The company has also launched the Smart Wealth app in 2024.

Subsidiaries and Associates

Notable subsidiaries and affiliates of HDFC Bank include:

Name Type Ownership Shares Referees HDFC Life Life Insurance 50.37% HDFC Ergonomics General Insurance 50.48% HDFC Asset Management Mutual Funds 52.55% HDFC Securities SPAN > Stockbroking 95.48% HDFC Financial Services Consumer Finance 94.84% HDFC Capital Advisors Private Equity Real Estate 90% HDFC Credira Education Finance 9.99%

Listing and Shareholding

HDFC Bank Pune Branch

HDFC Bank's shares are listed on the Bombay Stock Exchange and the National Stock Exchange of India. Its American Depositary Receipts are listed on the New York Stock Exchange.

Its Global Depositary Receipts (GDRs) were listed on the Luxembourg Stock Exchange but were terminated by the Board due to low trading volumes.

Dispute

On December 2, 2020, the Reserve Bank of India (RBI) ordered HDFC Bank to temporarily halt the issuance of new credit cards and all planned activities under the bank's Digital 2.0 initiative, citing disruptions to the bank's online banking, mobile banking and payment utility services.

On January 29, 2020, the Reserve Bank of India imposed a fine on HDFC Bank for failing to conduct continuous due diligence while there were 39 current accounts available for bidding in the IPO.

An HDFC bank manager was arrested for fraud involving the amount of Rs 59,41,000 in Orissa.

Altico Capital and Dubai-based Mashreq Bank have approached the Reserve Bank of India accusing HDFC Bank of regulatory violations by deducting from a portion of the funds raised by the company through External Commercial Borrowing (ECB) and parked at the bank. They allege that HDFC Bank's decision to transfer money from the account may have violated the Reserve Bank of India's end-use rules.

On May 27, 2021, the Reserve Bank of India fined HDFC Bank Rs 100 million for deficiencies in regulatory compliance in its car loan portfolio. The above penalties are for breaches of certain provisions of the Banking Regulation Act 1949

In March 2023, HDB Financial Services suffered breaches that exposed data of more than 70 million customers, including email addresses, names, dates of birth, phone numbers, genders, postcodes and loan information belonging to customers.

Awards and Honors

2016

• KPMG Best Bank of India, Best Bank of the Year and Best Digital Bank Initiative Awards
• BrandZ Ranking, Named India's Most Valuable Brand for the Third Consecutive Year
• Asia Finance Best Company in Asia Survey 2015, Best Managed Listed Company - India