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Indian Financial Services Sector: Aditya Puri, the iconic MD of HDFC Bank speaks

25 Dec, 2019 Divesh Mishra

Within 25 years of its incorporation, HDFC Bank has come into the forefront of the BFSI Sector in India. The space in this blog is too little to cover even a fraction of achievements of this bank. A few points which should not skip, though are:

1. The bank’s classification as one of the three Indian banks which are ‘too big to be allowed to fail’ along with SBI and ICICI

2. The bank becoming reference point for whatever is good in the financial services of the country. Every private and public sector bank and each large NBFC tries hard to emulate HDFC Bank’s business, HR, operations, risk and customer service practises.

3. The bank crossing USD 80 b in market capitalisation and staying at the third position after TCS and RIL. HDFC Bank has couple of fully owned subsidiaries such as HDB Finance and HDFC Securities. The unofficial / untraded value of their equity capital, if added back to HDFC Bank, will ensure the latter’s market value to exceed USD 100b.

4. Mr. Aditya Puri as the longest serving CEO of any bank in the country, ever. It is not a secret that he is now a universal role model for any and every Industrial Sector CEO of the country and not only of the BFSI sector.


The readers follow this laconic industry leader and they had an opportunity to read his thoughts which, in essence, are summarised as below:

– Technology is opening up a great number of opportunities for a large chunk of population

– NBFCs should be more vigilant about their asset liability management. These also require higher level of regulatory control in the line of banks. Also that an NBFC company going down is not a systemic risk.

– Our GDP is likely to grow in the range of 7.4-8%

– Rupee / USD exchange rate to stay in the range of 72.5 – 74

– Technology is instrumental in bringing transparency and efficiency

– HDFC Bank has 50% of its network in semi urban and the rural areas. Now there is a lot of financial information available in the deeper geography. As a result specific products are being developed to cater to this sector.

– There is nothing unusual between the RBI – GoI ties. Constructive criticism should be welcomed.

– Demonetisation added to digitisation. It also brought Rs. 3.5 lac cr into the system and this money is now examinable. Both Notebandi and GST are conceptually strong and led to greater formalisation of the economy.

– Self employment has created jobs. Parivartan scheme of the Bank has given livelihood to 8m jobs.

– Skill development need be the area of focus.

– Reaching out to the semi urban and the rural areas has two aspects. While the technology addresses the cost of reaching out, risk factor is being partly assisted by credit bureaus.

– That the Bank is confidently competing with the NBFCs in the field of unsecured loans. That banking is a business of taking calculated risk.

– Two rules of lending: lend only to the one who can repay and secondly, make him repay.

– In this consumption driven country, there has to be more and more manufacturing. This would push our exposure to global trade.

– HDFC Bank, the best banking brand in the country has 17% capital adequacy ratio.

– That HDFC Bank is now a mobile phone driven bank and providing its services to very deep geography in the language that the customer understands.


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