Everyone must have heard about the HDFC bank in India. Many of us may have accounts in many of its branches. Some may have availed of loans, credits, and invested in mutual funds. The bank has overtaken most of the private sector banks to emerge victorious in the financial sector.
Through this article, it will enlighten my readers about the services and history of HDFC bank. I will provide glimpses of the history of this bank. Then I will put forth the various financial services that it has to offer for its customers. By the end of this article, you will have a clear understanding of what has made this bank a household name today. So, let’s get started.
Ever wondered what HDFC stands for? It is the short form for Housing Development Financial Corporation Limited (HDFC). Since its initiation, it has amassed huge assets and a market capitalization that has paved the way for its success. It is currently headed by Mr. Sashidhar Jagdishan.
Today HDFC bank is one of India’s most powerful banks. It is a private sector bank that provides various banking and investment banking services nationally and internationally. It was founded in the year 1994 under the guidance of Mr. Hasmukhbhai Parekh.
Since then, the banking company has expanded its reach in various cities across India and overseas. On the international level, it has branches in Bahrain, Hong Kong, and offices in UAE and Kenya. To date, the company has branches across 2,848 cities in India with a vast network of 5,430 branches.
More Information About HDFC Bank
The HDFC bank was inaugurated in 1994. It started deploying banking services as a Scheduled Commercial bank in 1995. The Housing Development Finance Corporation Limited was the first company to set up a private bank in India. It provided services from the registered bank in Mumbai. The current CEO of the HDFC bank is Mr. Deepak Parekh. The main aim of the HDFC bank was to become a world-class Indian Bank.
It has truly lived up to its mission and has become the most successful bank today. The awards and honors the bank had received in India and worldwide speak for themselves. It is known for its good customer service, revolutions in the financial business, and its sustainability. The bank has introduced various products in the market. Apart from these, it had also conducted several drives and launched initiatives for the betterment of society.
Its main objective was to become the first choice of every investor in every domain of the bank services. Its second objective was to achieve substantial growth in bank assets. No wonder it had met all its business objectives, and it has continually been delivering quality services to the new customer. The bank continues to conquer the hearts and minds of every investor and its existing customers.
Mergers Of HDFC Bank
The HDFC bank had merged with the Centurion Bank of Punjab (CBoP) on 23rd May 2008. This merger was approved by the Reserved Bank of India. The merger was directly proportional to the shareholders of CBoP receiving a share of the HDFC bank. The shares would be provided to each of the 29 shares of CBoP. The merger provided great benefits to the HDFC bank.
For instance, the bank network had significantly incremented by a good number. This meant that the HDFC bank could now deliver services to more masses. The added new workforce of the CBoP created a larger pool of skilled workmen. Thus, the merger was a huge gain for the HDFC bank.
Times Bank Limited was an Indian Bank in the private sector. On 26th February 2000, the Times bank had merged with the HDFC bank. It was the first time that two banks had merged in the 21st century. The combination of the two banks implied that the shareholders of the Times bank would have received one share of the HDFC bank. This would continue for every 5.75 shares of the Times bank.
History Of HDFC Bank
It’s been 26 years since the bank first opened at its registered office in Mumbai. As per the Reserve Bank of India RBI’s policy about the liberalization of the banking industry in India, the request by the HDFC bank to set up the first Indian bank in the private sector was approved.
The HDFC bank, as it is popularly called, was one of the first banks in India. The main operations of the financial company as a Scheduled Commercial bank first commenced back in January 1995.
The bank has had a long history. Some of these factors were instrumental in making it the premium bank in India. So, here I have provided a descriptive guide about the history of this bank.
The HDFC bank was founded on 30th August in the year 1994. It had established a partnership with the National Westminster Bank Pc. and its subsidiaries. The banks agreed-upon a 20% subscription of the banks’ issued capital and assistance from the technical domain to promote the banking business.
The bank issued the subscribers of the Memorandum and the Articles of Association with 70 equity shares. During the same time, the bank promoters were allotted with 5 crore equity shares. Moreover, the HDFC Employment Welfare Trust was also allotted shares worth 5,09,20,000 on 22nd December 1994
Later on, 16th January 1995, the Jarrington Pte. Ltd was also allotted 90,79,930 number of equity shares. The NatWest Group received 400,00,000 number of shares based on private placement. The public also received equity shares on 9th May 1995 that were 500,00,000 in number.
By this time, the HDFC bank had opened its first branch on 16th January in Ramon House at Church gate in Mumbai. An efficient operating system was designed and created by the engineers of the bank for fortifying the computer network of the bank.
The bank had established a good reputation in the financial businesses and the market. This paved the way for the banking consortia of over 50 countries. The consortia included leading multinational companies, public sector companies, and several flagship companies of the local business.
The transaction in the Indian financial market was handled in a new dealing room. The room was constructed this year to facilitate this process. The HDFC bank’s Certificates on Deposits were earned a rating of PP1+. The rating was the highest for any short-term financial tools at that time.
At Powai in Mumbai, the bank had established a modern hub to store the bank’s central computers and servers. The servers had information about all the new products and services and the branches that the bank had established.
The proposition for telebanking was launched by HDFC in Mumbai. The term telebanking was first introduced at the Chandiveli branch of the HDFC network.
By now, the bank had established 28 bank branches in India. These branches had initiated an account that required the investors to deposit a minimum balance for opening the account. This feature was first introduced by the HDFC bank in India. To date, this practice has been cultivated across several financial institutions in India.
They had also launched a loan product. This product facilitated the payment of fees as announced by the Bangalore Mahanagar Palike.
The HDFC bank signed an MOU with the Ahmedabad Stock Exchange (ASE) so that it could play the role of a clearance bank.
The strengthening of bonds with the branch in Calcutta was proposed in 1998. They planned to make an addition of two more branches by the first quarter of the upcoming financial year 1999.
They had inked a memorandum with the National Stock Exchange (NSE) around the same year. This agreement stated that the bank would give an additional charge over the broker’s deposit. It was only if they provide a loan against share facility to the NSE brokers.
With the beginning of the 21st century, the bank had also begun establishing new connections in the world. Starting with Singapore Telecom’s e-commerce arm Sesami.com Pvt Ltd. The HDFC bank had signed an agreement with this company to boost its reach.
The HDFC bank had launched a new facility call the ‘Freedom- The e-Age Savings Account.’ this account was specifically designed for cellular phone users.
Trichy and Coimbatore, the southernmost regions of India, had received wireless application protocol-based mobile banking. This was newly introduced at that time. The HDFC bank was instrumental in launching this facility in association with Aircel.
Aurangabad had received the first HDFC bank with the commencement of the new year 2001.
The HDFC Standard Life Insurance had established a memorandum of understanding with the Indian Bank. The Indian bank was based in the southern capital of Chennai.
The bank had first launched its International Maestro Debit Card in association with Master Card.
The Board of Directors dealt with the resignation of two of its directors. These were Mr. S. S. Thakur and Mr. Amit Judge. They had resigned from their office on 30th March.
The HDFC bank had introduced a new online account. The online account service was called ‘One View.’ The bank launched the services to all its customers.
The HDFC bank had launched various new products in the year 2002. These products were inclined towards the wealth management program designed to increase the number of the customer base. The Financial Planner was a non-interactive product that was available for the customers. This product was available at the base price of Rs.10,000. The mass affluent segment could avail of the fee-based advisory program. This program was earlier available only to the high net worth customers. The wealth management program was a highly beneficial initiative by the bank for the betterment of its customers. This program took into account various factors like the financial goal and the risk profile, including equity, customers age, MFs, and RBI Relief Bonds.
The resident foreign currency account was launched by the HDFC bank.
The co-branded credit card with e-Seva was unveiled by the HDFC bank.
Mr. Arvind Pande was appointed as the Additional Director on the 15th of January 2003. His appointment was approved by the Board of Directors. It was highlighted under Section 260 of the Companies Act, 1956.
This year the Board had appointed Mr. Ranjan Kapur and Mr. Bobby Parikh as the Additional Directors.
The HDFC bank had introduced the concept of loyalty rewards. These rewards were specifically meant only for the credit and the debit cardholders. This program was called the InstaWonderz.
The HDFC bank was aiming for the upliftment of the small and medium scaled enterprises (SMEs) in India. For this, it had launched a credit card with MasterCard International.
The HDFC bank had established two more branches in Andhra Pradesh.
Osim intended to team up with the HDFC bank for consumer loans.
The HDFC bank had inaugurated a facility for the benefit of online shopping.
The HDFC bank had teamed with the TATA Pipes to offer credit facilities to the Indian farmers.
Mr. Pandit Palande was appointed as the new Additional Director by the HDFC bank. He was appointed by the Board of HDFC bank on 24th April 2007.
The HDFC had also appointed Mr. Paresh Sukthankar and Mr. Harish Engineer as the Executive Directors. This was declared at the conference held on 12th October 2007. These gentlemen had been the senior employees of the since its initiation in 1994.
The HDFC bank had tied-up with the Postal Department to extend its network in the rural areas.
The bank had won the ‘Nasscom IT User’ award.
The HDFC bank had inaugurated its first bank overseas. This bank was opened in Bahrain.
The HDFC bank had merged with the Centurion Bank of Punjab. The merger had taken place at a share swap ratio of 1:29.
The HDFC bank had won the AsiaMoney award yet again. It had bagged the title of ‘ Best Domestic Bank’.
The electronic payment collection facility was offered to the Guruvayoor Devaswom by the HDFC bank.
The housing finance major of the HDFC bank had introduced a variable interest rate on the recurring deposits. These interest rates were offered to attract long-term deposits. It was brought to the notice of the Board that the applicants withdraw their funds when the interest rates peak. To avoid such circumstances, these rates were introduced.
The bank was aiming for 3G services to boost their mobile banking.
By this year, the HDFC bank had already opened 1,725 branches.
At the Skotch Financial Inclusion Awards, the HDFC bank was named as the Organization of the Year.
The HDFC bank was instrumental in launching the Times Card.
The ‘Jet Privilege-HDFC Bank World Debit Card was launched. This was a joint initiative by the HDFC bank and Jet Airways.
The Bank had set a GUINNESS WORLD RECORD. They held the record for organizing the largest blood donation drive on a single day across the globe.
A digital bank was launched by the HDFC bank. This for intended only for the customers of small and medium enterprises.
The HDFC attains the top rank in the Institutional Investor Magazine.
The HDFC bank had launched a student card this year.
An initiative called the ‘SmartUp Zone’ was launched to uplift the startups.
You can read about the services provided by the HDFC bank in our other article.