HDFC BANK LTD [HDB] Filings

20-F 1 d759422d20f.htm FORM 20-F Form 20-F

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

☐	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

☐	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

Commission file number 001-15216

HDFC BANK LIMITED

(Exact name of Registrant as specified in its charter)

Not Applicable

(Translation of Registrant’s name into English)

India

(Jurisdiction of incorporation or organization)

HDFC Bank House,

Senapati Bapat Marg

Lower Parel

, Mumbai 400013, India

(Address of principal executive offices)

Name: Ajay Agarwal, Company Secretary

Telephone: 91-22-6631-6000

Email: ajay.agarwal2@hdfcbank.com

Office Address: HDFC Bank Limited; 4th Floor, HDFC House, 169, HT Parekh Marg,

Backbay Reclamation, Churchgate, Mumbai, Maharashtra 400020, India.

(Name, telephone, email and/or facsimile number and address of company contact person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
American Depositary Shares, each representing three Equity Shares, Par value Rs. 1.0 per share	HDB	The New York Stock Exchange

Equity Shares, Par value Rs. 1.0 per share		The New York Stock Exchange*

*	Not for trading, but only in connection with the registration of American Depositary Shares pursuant to the requirements of the Securities and Exchange Commission.

Securities registered or to be registered pursuant to Section 12(g) of the Act: Not Applicable

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: Not Applicable

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:

Equity Shares, as of March 31, 2024 7,596,910,662

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐ No ☒

Note—Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Emerging growth company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on the attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:


U.S. GAAP ☒		International Financial Reporting Standards as issued by the International Accounting Standards Board ☐		Other ☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow: Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

TABLE OF CONTENTS


EXCHANGE RATES AND CERTAIN DEFINED TERMS			1
FORWARD-LOOKING STATEMENTS			3
BUSINESS			4
RISK FACTORS			44
CERTAIN INFORMATION ABOUT OUR AMERICAN DEPOSITARY SHARES AND EQUITY SHARES			83
DESCRIPTION OF EQUITY SHARES			84
DESCRIPTION OF AMERICAN DEPOSITARY SHARES			88
DIVIDEND POLICY			90
SELECTED FINANCIAL AND OTHER DATA			91
SELECTED STATISTICAL INFORMATION			94
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			102
MANAGEMENT			135
PRINCIPAL SHAREHOLDERS			162
RELATED PARTY TRANSACTIONS			163
TAXATION			166
SUPERVISION AND REGULATION			172
EXCHANGE CONTROLS			224
RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES			226
ADDITIONAL INFORMATION			230
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING			231
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM – INTERNAL CONTROLS OVER FINANCIAL REPORTING			232
FINANCIAL STATEMENTS			F-1
EXHIBIT INDEX			EI-1
SIGNATURES			S-1

Table of Contents

CROSS REFERENCE SHEET

Form 20-F


	Item Caption	Location
Part I

Item 1	Identity of Directors, Senior Management and Advisors	Not Applicable

Item 2	Offer Statistics and Expected Timetable	Not Applicable

Item 3	Key Information	Risk Factors	44

Item 4	Information on the Company	Business	4

		Selected Statistical Information	94

		Management’s Discussion and Analysis of Financial Condition and Results of Operations	102

		Supervision and Regulation	172

Item 4A	Unresolved Staff Comments	Not Applicable

Item 5	Operating and Financial Review and Prospects	Exchange Rates and Certain Defined Terms	1

		Selected Financial and Other Data	91

		Management’s Discussion and Analysis of Financial Condition and Results of Operations	102

Item 6	Directors, Senior Management and Employees	Business—Employees	38

		Management	135

		Principal Shareholders	162

		Management’s Discussion and Analysis of Financial Condition and Results of Operations—Accounting Restatements and Recovery of Erroneously Awarded Compensation	134

Item 7	Major Shareholders and Related Party Transactions	Principal Shareholders	162

		Management—Loans to Members of Our Senior Management	154

		Related Party Transactions	163

Item 8	Financial Information	Report of Independent Registered Public Accounting Firm	F-2

		Consolidated Financial Statements and the Notes thereto	F-6

		Business—Legal Proceedings	39

		Dividend Policy	90

Item 9	The Offer and Listing	Certain Information About Our American Depositary Shares and Equity Shares	83

Item 10	Additional Information	Management	135

		Description of Equity Shares	84

		Management’s Discussion and Analysis of Financial Condition and Results of Operations	102

		Taxation	166

		Supervision and Regulation	172

		Exchange Controls	224

		Restrictions on Foreign Ownership of Indian Securities	226

		Additional Information	230

Table of Contents

CROSS REFERENCE SHEET


	Item Caption	Location

Item 11	Quantitative and Qualitative Disclosures About Market Risk	Business—Risk Management	28

		Selected Statistical Information	94

Item 12	Description of Securities Other than Equity Securities	Description of American Depositary Shares—Fees and Charges for Holders of American Depositary Shares	88
Part II

Item 13	Defaults, Dividend Arrearages and Delinquencies	Not Applicable

Item 14	Material Modifications to the Rights of Security Holders and Use of Proceeds	Management’s Discussion and Analysis of Financial Condition and Results of Operations—Transaction with HDFC Limited	102

Item 15	Controls and Procedures	Management—Controls and Procedures	155

		Management’s Report on Internal Control Over Financial Reporting	231

		Report of Independent Registered Public Accounting Firm—Internal Controls Over Financial Reporting	232

Item 16A	Audit Committee Financial Expert	Management—Audit Committee Financial Expert	156

Item 16B	Code of Ethics	Management—Code of Ethics	156

Item 16C	Principal Accountant Fees and Services	Management—Principal Accountant Fees and Services	157

Item 16D	Exemption from the Listing Standards for Audit Committees	Not Applicable

Item 16E	Purchases of Equity Securities by the Issuer and Affiliated Purchasers	Management’s Discussion and Analysis of Financial Condition and Results of Operations—Purchases of Equity Shares by HDFC Bank and Affiliated Purchasers	134

Item 16F	Changes in or disagreements with accountants	Not Applicable

Item 16G	Significant Differences in Corporate Governance Practices	Management—Compliance with NYSE Listing Standards on Corporate Governance	157

Item 16H	Mine Safety Disclosure	Not Applicable

Item 16I	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	Not Applicable

Item 16J	Insider Trading Policies	Management—Insider Trading Policies	161

Item 16K	Cybersecurity	Management’s Discussion and Analysis of Financial Condition and Results of Operations— Cybersecurity	130

Item 17	Financial Statements	Not Applicable

Item 18	Financial Statements	Consolidated Financial Statements and the Notes thereto	F-1

Item 19	Exhibits	Exhibit Index	EI-1

iii

EXCHANGE RATES AND CERTAIN DEFINED TERMS

In this document, all references to “we”, “us”, “our”, “HDFC Bank” or “the Bank” or “the Group” shall mean HDFC Bank Limited or where the context requires also to its subsidiaries whose financials are consolidated for accounting purposes. References to the “U.S.” or “United States” are to the United States of America, its territories and its possessions. References to “India” are to the Republic of India. References to the “Companies Act” in the document mean the Indian Companies Act, 2013 and all rules and regulations issued thereunder. References to “$”, “US$”, “dollars” or “United States dollars” are to the legal currency of the United States and references to “Rs.”, “INR”, “rupees” or “Indian rupees” are to the legal currency of India.

Our financial statements are presented in Indian rupees and in some cases translated into United States dollars. The financial statements and all other financial data included in this report, except as otherwise noted, are prepared in accordance with United States generally accepted accounting principles, or U.S. GAAP. U.S. GAAP differs in certain material respects from accounting principles generally accepted in India, the requirements of India’s Banking Regulation Act and related regulations issued by the Reserve Bank of India (“RBI”) (collectively, “Indian GAAP”), which form the basis of our statutory general purpose financial statements in India. Principal differences applicable to our business include: determination of the allowance for credit losses, classification and valuation of investments, classification and valuation of insurance contracts, accounting for deferred income taxes, stock-based compensation, loan origination fees, derivative financial instruments, business combinations and the presentation format and disclosures of the financial statements and related notes. References to a particular “fiscal” are to our fiscal year ended March 31 of such year.

Fluctuations in the exchange rate between the Indian rupee and the United States dollar will affect the United States dollar equivalent of the Indian rupee price of the equity shares on the Indian stock exchanges and, as a result, will affect the market price of our American Depositary Shares (“ADSs”) in the United States. These fluctuations will also affect the conversion into United States dollars by the depositary of any cash dividends paid in Indian rupees on the equity shares represented by ADSs.

After depreciating between fiscal year 2018 and 2020, the rupee appreciated by 2.8 percent in fiscal year 2021. This was in part due to a weak dollar and robust foreign flows. Additionally, India registered a rare current account surplus of 0.9 percent of GDP in fiscal 2021 (compared to a deficit of 0.9 percent in the previous fiscal year), which supported the rupee during fiscal 2021. In fiscal year 2021, the rupee traded in the range of 75.08-73.14 per US$ 1.00. However, with foreign capital outflows, geo-political risks due to the Russia-Ukraine conflict, and the beginning of an interest rate hike cycle by major central banks, the rupee depreciated by 3.8 percent against the United States dollar in fiscal year 2022. In fiscal year 2022, the rupee ranged between a high of Rs. 77.07 per US$ 1.00 and a low of Rs. 72.37 per US$ 1.00. The rupee depreciation intensified in fiscal year 2023 due to a sharp increase in U.S. interest rates. With a strong United States dollar and foreign institutional investors (“FII”) outflows, the rupee depreciated by 8.1 percent in fiscal year 2023. The rupee ranged between a high of Rs. 83.20 per US$ 1.00 and a low of Rs. 75.39 per US$ 1.00 during fiscal year 2023.

During fiscal year 2024, the rupee traded in a tight range against the United States dollar (trading between Rs. 81.65 and Rs. 83.582 per US$ 1.00) and depreciated by 1.4 percent. The RBI has opted for a two-way intervention strategy to manage the volatility in exchange rates. While the RBI sold United States dollars to limit depreciation pressures, it bought United States dollars during episodes of a weak United States dollar to build its foreign exchange reserves. During fiscal year 2024, equity flows and investment in debt instruments by FIIs ahead of India’s sovereign debt inclusion in major global bond indices have supported the rupee against the United States dollar.

Looking ahead, factors that could cause improvements in the rupee against the United States dollar in fiscal 2025 include: (i) better macro fundamentals (GDP and inflation) compared to peers; (ii) comfortable current account position; (iii) higher FII flows, both in equity and debt (inclusion in the JP Morgan bond index from June 2024 onwards, and inclusion in the Bloomberg local EM debt index from January 2025); and (iv) some potential weakness in the U.S. dollar as the Federal Reserve begins to cut interest rates.

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Although we have translated selected Indian rupee amounts in this document into United States dollars for convenience, this does not mean that the Indian rupee amounts referred to could have been, or could be, converted to United States dollars at any particular rate, the rates stated above, or at all. Unless otherwise stated, all translations from Indian rupees to United States dollars are based on the noon buying rate in the City of New York for cable transfers in Indian rupees at US$ 1.00 = Rs. 83.34 on March 31, 2024. The Federal Reserve Bank of New York certifies this rate for customs purposes on each date the rate is given. The noon buying rate on July 12, 2024 was Rs. 83.48 per US$ 1.00.

Our financial statement data as of and for the years ended March 31, 2022 and 2023 are not comparable with our financial statement data as of and for the year ended March 31, 2024 because of the occurrence, in fiscal 2024, of the Transaction (as defined herein). The Transaction was consummated on July 1, 2023 (the “Transaction Effective Date”). As of the Transaction Effective Date:

•

HDFC Investments Limited and HDFC Holdings Limited were amalgamated with and into HDFC Limited, and stood dissolved without being wound up, without any further act or deed;

•

HDFC Limited was amalgamated with and into HDFC Bank, and HDFC Limited stood dissolved without being wound up, without any further act or deed; and

•

the other subsidiaries of HDFC Limited became subsidiaries and affiliates of HDFC Bank.

We have accounted for the Transaction as a business combination using the acquisition method of accounting under ASC Topic 805, Business Combinations, which requires that the assets acquired and the liabilities assumed be recorded at the date of acquisition at their respective fair values. Our cost of acquiring HDFC Limited was measured by the market value of the shares we issued to HDFC Limited’s former shareholders in connection with the Transaction. The Transaction consideration in excess of the Bank’s interest and HDFC Limited’s net fair value of identifiable assets and liabilities have been recognized as goodwill. The information as of and for the year ended March 31, 2024 incorporates the effect of applying the acquisition method of accounting as from July 1, 2023. No acquired business income or cash flows are included in our financial statements prior to that date.

As a result of the Transaction, we have reflected two new segments in our U.S. GAAP financial statements: “insurance services”, including long-term life insurance solutions provided via our subsidiary HDFC Life Insurance Company Ltd, and “others”, consisting primarily of activities that we carry through HDFC Limited’s other former specialized subsidiaries. See “

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Transaction with HDFC Limited

”.

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FORWARD-LOOKING STATEMENTS

We have included statements in this report which contain words or phrases such as “will”, “aim”, “will likely result”, “believe”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “contemplate”, “seek to”, “future”, “objective”, “goal”, “project”, “should”, “will pursue” and similar expressions or variations of these expressions, that are “forward-looking statements”. Actual results may differ materially from those suggested by the forward-looking statements due to certain risks or uncertainties associated with our expectations with respect to, but not limited to, our ability to implement our strategy successfully, the market acceptance of and demand for various banking services, our ability to integrate HDFC Limited and its subsidiaries into our operations and to realize the anticipated benefits of the Transaction (as defined below), including with respect to the development of our new insurance services, brokerage account services, and financial management services, future levels of our non-performing/ impaired assets, our growth and expansion, the adequacy of our provision/allowance for credit and investment losses, technological changes, volatility in investment income, our ability to market new products, cash flow projections, the outcome of any legal, tax or regulatory proceedings in India and in other jurisdictions we are or become a party to, the future impact of new accounting standards, our ability to pay dividends, the impact of changes in banking regulations and other regulatory changes on us in India and other jurisdictions, our ability to roll over our short term funding sources and our exposure to market and operational risks. By their nature, certain of the market risk disclosures are only estimates and could be materially different from what may actually occur in the future. As a result, actual future gains, losses or impact on net income could materially differ from those that have been estimated.

In addition, other factors that could cause actual results to differ materially from those estimated by the forward-looking statements contained in this document include, but are not limited to: general economic and political conditions; instability or uncertainty in India and the other countries which have an impact on our business activities or investments caused by any factor, including terrorist attacks in India, the United States or elsewhere, anti-terrorist or other attacks by the United States, a United States-led coalition or any other country, such as the joint strike launched by the United States and the United Kingdom in Yemen following the Houthis group’s attack on international ships in the Red Sea; the ongoing war between Russia and Ukraine; the recent geo-political conflict between Israel and Hamas which complicates the geopolitical landscape; tensions between India and Pakistan related to the Kashmir region or between India and China; military armament or social unrest in any part of India; the monetary and interest rate policies of the Government of India; natural calamities, pandemics, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices; the performance of the financial markets in India and globally; changes in Indian and foreign laws and regulations, including tax, accounting, banking regulations, insurance regulations and securities regulations; changes in competition and the pricing environment in India; and regional or general changes in asset valuations. For further discussion on the factors that could cause actual results to differ, see “

Risk Factors

”.

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BUSINESS

Overview

We are a new-generation private sector bank in India. Our goal is to be the preferred provider of financial services to our customers in India across metro, urban, semi-urban and rural markets. Our strategy is to provide a comprehensive range of financial products and services to our customers through multiple distribution channels, with what we believe are high-quality services, advanced technology platforms and superior execution. Since completion of the Transaction (as defined under “—

About Our Bank

” below) on July 1, 2023, we are also engaged in life and general insurance, asset management and securities broking products and services through our specialized subsidiaries and joint venture.

We have four principal business activities: retail banking, wholesale banking, treasury services and insurance services. Our retail banking products include deposit products, loans, including housing loans and loans to small and medium enterprises, credit cards, debit cards, third-party mutual funds and insurance products, bill payment services, and other products and services. Under wholesale banking, we offer a wide range of commercial and transactional banking services, including working capital finance, trade services, transactional services and cash management. We are also a leading provider of structured solutions in India, which combine cash management services with vendor and distributor finance to facilitate supply chain management for our corporate customers. Since completion of the Transaction, we also provide construction finance. Our treasury operations manage our balance sheet including liquidity and interest rate risks thereon, and include customer-driven services such as advisory services related to foreign exchange and derivative transactions for corporate and institutional customers, supplemented by proprietary trading, including Indian Government securities.

Our non-banking finance company (“NBFC”) subsidiary HDB Financial Services Limited (“HDBFSL”) offers a wide range of loans and asset finance products including mortgage loans, commercial vehicle loans, consumer loans and gold loans, as well as a range of business process outsourcing solutions. We provide our customers with brokerage accounts through our subsidiary HDFC Securities Limited (“HSL”), which we believe is one of the leading stock brokerage companies in India and which offers a suite of products and services across various asset classes, such as equity, gold and debt, and via multiple platforms,

i.e.

, online, mobile, telephone and branches.

Since completion of the Transaction, we provide long-term life insurance solutions via our subsidiary HDFC Life Insurance Company Limited (“HDFC Life”) and a complete range of general insurance products via our joint venture HDFC ERGO General Insurance Company Limited (“HDFC ERGO”).

Since completion of the Transaction, we also offer a comprehensive suite of savings and investment products via our subsidiary HDFC Asset Management Company Limited (“HDFC AMC”), one of India’s largest mutual fund managers.

Since commencing operations in January 1995, we have grown rapidly, including most recently as a result of the Transaction. As of March 31, 2024, we had 8,738 branches and 20,938 ATMs/Cash Deposit and Withdrawal Machines (“CDMs”) in 4,065 cities and towns and 93.2 million customers, including the branches and customers acquired pursuant to the Transaction. In addition, as of March 31, 2024, we had 15,182 business correspondents, which were primarily manned by common service centers (“CSCs”). On account of the expansion in our geographical reach and the resultant increase in market penetration, our assets grew from Rs. 21,113.7 billion as of March 31, 2022, to Rs. 25,755.6 billion as of March 31, 2023 and to Rs. 44,118.6 billion as of March 31, 2024, which includes the assets acquired pursuant to the Transaction. Our net income increased from Rs. 386.0 billion for fiscal year 2022, to Rs. 495.4 billion for fiscal year 2023. Our net income was Rs. 622.7 billion in fiscal year 2024, including nine months of results post-completion of the Transaction. Our loans and deposits as of March 31, 2023 amounted to Rs. 17,052.9 billion and Rs. 18,826.6 billion, respectively. As of March 31, 2024, they were Rs. 26,335.7 billion and Rs. 23,768.2 billion, respectively, which includes the loans and deposits acquired pursuant to the Transaction. As of March 31, 2024, gross non-performing customer assets as a percentage of gross customer assets was 1.2 percent. Our net customer assets represented 111.4 percent of our deposits and our deposits represented 53.9 percent of our total liabilities and shareholders’ equity. The average non-interest-bearing current accounts and low-interest-bearing savings accounts represented 37.4 percent of average total deposits for the year ended March 31, 2024. These low-cost deposits and the cash float associated with our transactional services led to an average cost of funds (including equity) of 4.0 percent for fiscal year 2024. We had a return on tangible equity (net income as a percentage of average total shareholders’ equity reduced by goodwill and intangible assets) of 19.3 percent for fiscal year 2023 and 15.3 percent for fiscal year 2024. As at March 31, 2024, we had a total capital adequacy ratio (calculated pursuant to the RBI guidelines) of 18.8 percent. Our Common Equity Tier I (“CET-I”) ratio was 16.3 percent as at March 31, 2024. See “

Risk Factors—Risks Relating to Our Ownership Structure and the Transaction

—

We may be unable to successfully integrate HDFC Limited’s business into the Bank’s business and, as a result, we may fail to realize the anticipated benefits of the Transaction, which has exposed us to incremental regulatory requirements”

and “

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Certain Factors and Trends Affecting Our Results of Operations.

”

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Macro-economic Trends

As a result of trade tensions and geo-political risks, global growth slowed to 2.8 percent in 2019 from 3.6 percent in 2018, according to IMF estimates. In 2020, growth declined by 2.7 percent, driven by the COVID-19 pandemic and related lockdowns and movement restrictions across the globe, which caused GDP to contract in major economies. With the availability of vaccines and policy support, the global economy started regaining strength in 2021, when, as per the International Monetary Fund (“IMF”), global growth stood at 6.5 percent. However, global recovery halted again in 2022 on account of the Russia-Ukraine crisis, the China slowdown, rising commodity prices and elevated inflation. As per the IMF, global growth moderated to 3.5 percent in 2022. For 2023, the IMF revised global growth to 3.2 percent from 2.8 percent projected earlier, as growth was stronger than anticipated in the United States, and several major emerging markets and developing economies. Looking ahead in 2024, the IMF estimates global growth at 3.2 percent. Risks to the outlook include geopolitical tensions and weather shocks, fewer than expected rate cuts by major central banks and chances of faltering growth in China. The IMF estimates global growth at 3.2 percent in 2025 as well.

In fiscal year 2021, the COVID-19 pandemic adversely impacted India’s economic growth. The Government imposed a lockdown between March 25, 2020, and May 31, 2020. While this helped to control the spread of the pandemic during the first wave, it adversely impacted all sectors of the economy, with the consumption and services sectors worst affected. With improved mobility and policy measures, economic activity picked up in the second half of fiscal year 2021. GDP rebounded with 2.5 percent year-on-year growth in the second half of fiscal year 2021 as compared to a contraction of 14.6 percent in the first half of fiscal year 2021. For the full fiscal year 2021, India’s GDP declined by 5.8 percent in fiscal year 2021 compared to growth of 3.9 percent in the prior year.

However, the “second wave” of COVID-19 and related containment measures adversely affected the pace of recovery for the Indian economy during the first quarter of fiscal year 2022. On a quarter-by-quarter basis, India’s GDP declined by 15.3 percent in the first quarter of fiscal year 2022, although year-on-year growth stood at 23.0 percent, primarily due to support from a low base from the previous year. Economic activity started recovering from the second quarter of fiscal year 2022, but came under stress again in the second half of fiscal year 2022 as the Omicron variant started spreading. Overall, GDP growth stood at 9.7 percent in fiscal year 2022, against a decline of 5.8 percent in fiscal year 2021.

In the first quarter of fiscal year 2023, GDP growth in India rebounded sharply with support from the reopening of the economy. While year-on-year growth benefited from a low base, economic activity gained genuine traction during the first quarter. GDP growth stood at 12.8 percent year-on-year in the first quarter of fiscal year 2023. However, year-on-year GDP growth began to moderate from the second quarter, primarily due to a fading base effect. In addition, weak performance of the manufacturing sector and exports negatively impacted growth, in part due to elevated input costs as the Russia-Ukraine war caused supply chain disruptions. In the third quarter of fiscal year 2023, GDP growth moderated to 4.3 percent from 5.5 percent in the second quarter. However, GDP growth recovered to 6.2 percent in the fourth quarter of fiscal year 2023. For the full fiscal year 2023, GDP growth stood at 7.0 percent.

India’s growth was higher than expected in fiscal year 2024, driven by higher investments and a rebound in industrial performance. Full year growth for 2024 fiscal was 8.2 percent, up from 7.0 percent growth in fiscal year 2023. Looking forward, India’s GDP growth is estimated at 7.1 percent in fiscal year 2025, supported by Government investments. Further, GDP growth is likely to get impetus from some pick up in private capital expenditure and a likely recovery in rural consumption.

Geo-political tensions and lingering supply side disruptions weighed on domestic retail inflation in fiscal year 2023. Consumer Price Index (“CPI”) inflation rose to 7.8 percent in April 2022 and stayed above the RBI’s upper tolerance limit of 6.0 percent for the most part of fiscal year 2023. CPI inflation averaged at 6.7 percent in fiscal year 2023 compared to 5.5 percent in fiscal year 2022. After averaging at 4.6 percent in the first quarter of fiscal 2024, inflation rose to a high of 7.4 percent in July 2023 led by higher food inflation (driven largely by vegetables and cereals inflation). However, with Government intervention through a cooking gas (LPG) subsidy, the release of cereal stocks from its reserves and an export curb on rice, inflation moderated to 5.4 percent in the third quarter and 5.0 percent in the fourth quarter of fiscal year 2024 and averaged 5.4 percent for the full fiscal year 2024.

Inflation is expected to average 4.6 percent in fiscal year 2025. A favorable base effect and tempered core inflation (excluding food and fuel) are likely to provide support. Upside risks to the forecast could come from persistent inflation in pulses and cereals and an uneven distribution of monsoons.

In 2022 and 2023, major central banks raised interest rates sharply as inflation rose to record levels. The U.S. Federal Reserve increased its policy rate by 525 basis points to 5.25-5.50 percent between March 2022 and July 2023, reaching the highest level since 2007. Similarly, the European Central Bank raised the policy rate by 450 basis points to 3.75 percent (deposit rate) and the Bank of England increased the policy rate by 515 basis points to 5.25 percent. After a sharp increase in rates, major central banks have left rates unchanged. With moderating inflation, major central banks (including the European Central Bank, the Bank of Canada and the Swiss National Bank) have started cutting rates in 2024. However, sticky core inflation and elevated services inflation could push them to opt for a cautious approach on further rate cuts. In India, the RBI raised the policy rate cumulatively by 250 basis points to 6.50 percent and has kept them unchanged since its April 2023 policy meeting. Going forward, rate cuts are expected to begin from the third quarter of fiscal year 2025 in India and are likely to be aligned with the timing of the interest rate cut cycle by the U.S. Federal Reserve.

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In response to the adverse impact of the COVID-19 pandemic and related disruptions, the Government sharply increased its spending in both fiscal year 2021 and fiscal year 2022. While the fiscal deficit was 9.2 percent in fiscal year 2021, it narrowed to 6.8 percent in fiscal year 2022. The Government increased its capital spending plan significantly in fiscal years 2023 and 2024 to support growth, while remaining on track for fiscal consolidation. The fiscal deficit stood at 6.4 percent in fiscal year 2023 and at 5.6 percent of GDP in fiscal year 2024.

In the budget for fiscal year 2025, the Government retained its focus on fiscal consolidation and boosted capital expenditure. It plans to spend Rs. 11 trillion on capital expenditure with the fiscal deficit targeted at 4.9 percent of GDP, 20 bps lower than the interim budget target of 5.1 percent.

Additionally, the RBI has been conducting two-way tuning operations (Variable Rate Repos and Variable Rate Reverse Repos) of different tenures to manage liquidity conditions. The central bank has preferred to keep liquidity conditions tight for better transmission of previous rate hikes.

Further, net financial savings of households in India declined to 5.3 percent of GDP in fiscal year 2023, compared to 7.5 percent in fiscal year 2022 and 11.7 percent in fiscal year 2021 as financial liabilities of households increased in 2023 owing to higher lending rates. With interest rates remaining unchanged, this trend is expected to have continued into fiscal year 2024 as well. Looking ahead, although the RBI is taking measures to curb unsecured personal loans, and lending rates are expected to come down, net household financial savings may not improve as much as expected in fiscal year 2025.

About Our Bank

HDFC Bank Limited is a listed public limited company that was incorporated in August 1994 under the laws of India and commenced operations as a scheduled commercial bank in January 1995. In 2000, Times Bank Limited merged with us, and in 2008, we acquired Centurion Bank of Punjab Limited (“CBoP”).

Until June 2023, we were part of the HDFC group of companies established by Housing Development Finance Corporation Limited (“HDFC Limited”), formerly a listed public limited company. The Board of Directors of the Bank at its meeting held on April 04, 2022, approved a composite scheme of amalgamation (the “Scheme”) for the amalgamation of: (i) HDFC Investments Limited and HDFC Holdings Limited (the “Amalgamated Subsidiaries”), each a subsidiary of HDFC Limited, with and into HDFC Limited, and (ii) HDFC Limited with and into the Bank (the “Transaction”), which received all the required approvals and became effective from July 1, 2023. The share exchange ratio was 42 equity shares of HDFC Bank Limited (each having a face value of Rs. 1) for every 25 equity shares of HDFC Limited (each having a face value of Rs. 2). See “

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Transaction with HDFC Limited

.”

Prior to completion of the Transaction, HDFC Limited was primarily engaged in financial services, including mortgage lending, property-related lending and deposit services, which now form part of our business offerings. The former subsidiaries of HDFC Limited, which have become our subsidiaries and affiliates (except for the Amalgamated Subsidiaries), are also largely engaged in a range of financial services, including asset management, life insurance and general insurance. As of June 30, 2023, immediately prior to completion of the Transaction, HDFC Limited and its subsidiaries (together, the “HDFC Group”) owned 20.83 percent of our outstanding equity shares. See “

Principal Shareholders.

” Prior to completion of the Transaction, we had no agreements with HDFC Limited or any of its group companies that restricted us from competing with them or that restricted HDFC Limited or any of its group companies from competing with our business, and we distributed products of HDFC Limited and its group companies, such as home loans of HDFC Limited, life and general insurance products of HDFC Life and HDFC ERGO, respectively, and mutual funds of HDFC AMC.

Most of our subsidiaries are incorporated in India. Among our Indian subsidiaries, HDFC Life prepares its financial results in accordance with the accounting principles generally accepted in India (“Indian GAAP”), while the others do so in accordance with Indian Accounting Standards. Among our overseas subsidiaries, Griha Investments prepares its financial results in accordance with International Financial Reporting Standards and Griha Pte. Limited prepares its financial results in accordance with the Financial Reporting Standards of Singapore.

•

HDBFSL, a non-deposit-taking NBFC in which we hold a 95.2 percent stake, is engaged primarily in the business of retail asset financing. Its total assets and shareholders’ equity as of March 31, 2024 were Rs. 919.1 billion and Rs. 130.7 billion, respectively. Its net income before noncontrolling interest was Rs. 22.5 billion for fiscal year 2024. As of March 31, 2024, HDBFSL had 1,682 branches across 1,148 cities in India.

•

HSL, in which we hold a 95.4 percent stake, is primarily in the business of providing brokerage and other investment services. Its total assets and shareholders’ equity as of March 31, 2024 were Rs. 142.3 billion and Rs. 19.9 billion, respectively. Its net income before noncontrolling interest was Rs. 9.9 billion for fiscal year 2024. As of March 31, 2024, HSL had 184 branches across 139 cities in India.

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HDFC Life, a publicly listed company in which we hold a 50.4 percent stake, is a leading, long-term life insurance solutions provider in India. HDFC Life’s consolidated total assets and shareholders’ equity as of March 31, 2024, including its subsidiaries, were Rs. 3,158.9 billion and Rs. 148.1 billion, respectively. HDFC Life and its subsidiaries contributed Rs. 13.5 billion to consolidated net income before noncontrolling interest for fiscal year 2024, representing nine months of consolidated activities since completion of the Transaction. HDFC Life had 535 branches pan-India as of March 31, 2024.

•

HDFC AMC, a publicly listed company in which we hold a 52.5 percent stake, is the Investment Manager to HDFC Mutual Fund, one of the largest mutual funds in India, and offers a comprehensive suite of savings and investment products. HDFC AMC’s consolidated total assets and shareholders’ equity as of March 31, 2024, including its subsidiary, were Rs. 75.5 billion and Rs. 71.0 billion, respectively. HDFC AMC and its subsidiary contributed Rs. 14.7 billion to consolidated net income before noncontrolling interest for fiscal year 2024, representing nine months of consolidated activities since completion of the Transaction. HDFC AMC had 254 branches as of March 31, 2024.

•

Our subsidiary HDFC Capital Advisors Limited (“HDFC Capital”) provides long-term equity and mezzanine capital to developers at the land and pre-approval stage predominantly for the development of affordable and mid-income housing in India. Our wholly owned subsidiary HDFC Sales Private Limited (“HSPL”) markets and sells home loans for the Bank, including the distribution of insurance products to the Bank’s customers. Our wholly owned subsidiary HDFC Trustee Company Limited (“HDFC Trustee”) is the trustee company for HDFC Mutual Fund. Our overseas subsidiary Griha Investments (“Griha Investments”) acts as an investment manager to HIREF International LLC and its special purpose vehicles (“SPVs”), while our other overseas subsidiary Griha Pte. Limited (“Griha Pte”) acts as an investment manager to Singapore domiciled funds and their SPVs.

•

Our wholly owned subsidiary HDFC Education and Development Services Private Limited (“HDFC Edu”) is in the business of providing education management and consulting services. The Bank’s control of HDFC Edu is intended to be temporary. As directed by the RBI in connection with the Transaction, HDFC Edu is expected to be fully divested no later than July 1, 2025.

In the Transaction, we also acquired HDFC ERGO, a joint venture in which we hold a 50.5 percent stake and ERGO International AG (one of the insurance entities of the Munich Re Group in Germany) holds a 49.1 percent stake. HDFC ERGO offers a complete range of general insurance products such as motor, home, accident and health, commercial, specialty, and weather and crop business lines, all of which are offered through a multi-geography, multi-product and multi-channel distribution strategy. As of March 31, 2024, HDFC ERGO had a network of 266 branches and 497 digital offices spread across approximately 509 districts. In light of the governance arrangements of HDFC ERGO, we account for this entity under the equity method of accounting under U.S. GAAP. See “

Related Party Transactions—II. Other Related Party Transactions since April 1, 2023—HDFC ERGO General Insurance Company Limited (“HDFC ERGO”)

”.

Upon completion of the Transaction, HDFC Credila Financial Services Limited (“HDFC Credila”) became a subsidiary of the Bank. HDFC Credila is in the business of providing education loans. Following receipt of regulatory approval in February 2024, as directed by the RBI, we diluted our interest in HDFC Credila and held a 9.99 percent stake as of March 31, 2024, and HDFC Credila ceased to be a subsidiary of the Bank. See “

Related Party Transactions—II. Other Related Party Transactions since April 1, 2023—HDFC Credila Financial Services Limited (“HDFC Credila”)

”.

In the context of the regulatory approval of the Transaction, the RBI ordered that we divest our 100 percent stake in HDFC Edu no later than two years following completion of the Transaction (

i.e.

, by July 1, 2025). In furtherance of this direction, we initiated a sales process using the Swiss challenge method (

i.e.

, a bidding process in which interested parties present a bid to the seller, who then calls for counter bids). In this regard, on March 30, 2024, we entered into a binding term sheet with an interested party to serve as the base bid to seek counter offers from other parties wishing to participate in the Swiss challenge process. On July 20, 2024, we announced that the binding term sheet had expired without being extended. The Bank expects to continue the sale efforts with the other interested parties in the process. Upon completion of this process, the selected purchaser and HDFC Bank will enter into definitive documentation for the sale of the entire share capital of HDFC Edu.

In relation to the Transaction, the Bank had made applications to the RBI seeking certain forbearances and clarifications regarding the requirements applicable to HDFC Bank, as a combined entity, and its subsidiaries from completion of the Transaction, and we continue to engage with the RBI on some of these matters. The RBI has granted certain forbearances and clarifications which are largely operational and in line with applicable regulations. For more detail about RBI requirements as they apply to us following completion of the Transaction, see “

Risk Factors—Risks Relating to Our Ownership Structure and the Transaction—We may be unable to successfully integrate HDFC Limited’s business into the Bank’s business and, as a result, we may fail to realize the anticipated benefits of the Transaction, which has exposed us to incremental regulatory requirements.

”

For a listing of our subsidiaries, please see Exhibit 8 “

List of Subsidiaries of HDFC Bank Limited

” of this annual report on Form 20-F.

Our principal corporate and registered office is located at HDFC Bank House, Senapati Bapat Marg, Lower Parel, Mumbai 400 013, India. Our telephone number is 91-22-6652-1000. Our agent in the United States for the 2001, 2005, 2007, 2015 and 2018 ADS offerings is Depositary Management Corporation, 570 Lexington Avenue, New York, NY 10022.

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Our Competitive Strengths

We attribute our growth and continuing success to the following competitive strengths:

We have a strong brand presence and extensive reach through a large distribution network

We are focused on offering a comprehensive range of financial products and solutions tailored to meet the diverse needs of our customers. We are driven by our core values: operational excellence, customer focus, product leadership, people and sustainability. This has helped us grow and achieve our status as one of the largest private sector banks in India, while delivering value to our customers, stakeholders, the Government, employees and the community at large. The Transaction further strengthens our positioning as a financial services conglomerate by adding insurance and mutual funds institutions as the Bank’s subsidiaries. The Bank is now able to better leverage the significant complementarities that existed among HDFC Bank and HDFC Limited, thereby strengthening the HDFC Bank brand.

We believe HDFC Bank is one of the most trusted and preferred bank brands in India. We have been acknowledged as “Best Domestic Corporate Bank” and “Best Bank for SMEs” in India by Asia Money Magazine at the Asia Money Best Bank Awards 2023. We have also been acknowledged as the “Best Private Bank for Education and Training of Private Bankers (Asia)” and “Best Private Bank for growth strategy (Asia)” at The Global Private Banking Awards 2023. We have capitalized on our strong brand presence by establishing an extensive banking network throughout India, serving a broad range of customers in metro, urban, semi-urban and rural regions. As of March 31, 2024, we had 8,738 branches and 20,938 ATMs/CDMs in 4,065 cities and towns and over 93.2 million customers, and of our total branches, 52.3 percent were in the semi-urban and rural areas. In addition, we had 15,182 business correspondents, which were primarily manned by CSCs. Our extensive branch network is further complemented by our digital platforms, including internet banking, mobile banking, WhatsApp banking and phone banking solutions, to provide our customers with a lifestyle banking experience, which is categorized into seven categories: Pay, Save, Invest, Borrow, Shop, Trade and Insure. Our focus is on delivering a highly personalized multi-channel experience to our customers.

We provide a wide range of products and high-quality service to our clients in order to meet their financial needs

Whether in retail banking, wholesale banking, treasury services, or insurance services we consider ourselves a “one-stop-shop” for our customers’ banking and financial needs. We consider our high-quality service offerings to be a vital component of our business and believe in pursuing excellence in execution through multiple internal initiatives focused on continuous improvement. This pursuit of high-quality service and operational execution directly supports our ability to offer a wide range of banking products.

Our retail banking products include deposit products, retail loans (such as vehicle and personal loans), and other products and services, such as private banking, depositary accounts, foreign exchange services, distribution of third-party products (such as insurance and mutual funds), bill payments and sale of gold and silver bullion. We are the largest credit card issuer in India with 20.6 million cards outstanding as of March 31, 2024. Since completion of the Transaction, we are now directly engaged in providing housing loans. With respect to wholesale banking, we offer a wide range of commercial and transactional banking services to businesses and organizations of all sizes. Our services include working capital finance, term lending, project finance, trade services, supply chain financing, transactional services and cash management, as well as other services. Our product offerings include documentary credits and bank guarantees, foreign exchange and derivative products, investment banking services and corporate deposit products and services such as custodial and clearing bank services and correspondent banking. Since completion of the Transaction, we also provide construction finance. We have made significant inroads into the banking consortia of a number of leading Indian corporates, including multinationals. We believe our large scale and low cost of funding enable us to pursue high-quality wholesale financing opportunities competitively and at an advantage compared to our peers. We collect taxes for the Government and are bankers to companies in respect of issuances of equity shares and bonds to the public. Our NBFC subsidiary, HDBFSL, offers loan and asset finance products including tractor loans, consumer loans and gold loans, as well as business process outsourcing solutions such as form processing, document verification, contact center management and other front- and back-office services. Since completion of the Transaction, we provide long-term life insurance solutions via our subsidiary HDFC Life and a complete range of general insurance products via our joint venture, HDFC ERGO. Since completion of the Transaction, we also offer a comprehensive suite of savings and investment products via our subsidiary HDFC AMC, and we provide real estate private equity financing through our subsidiary HDFC Capital.

We are able to provide this wide range of products across our physical and digital network, meaning we can provide our targeted rural customers with banking products and services similar to those provided to our urban customers, which we believe gives us a competitive advantage. Our wide range of products and focus on superior service and execution also create multiple cross-selling opportunities for us and, we believe, promote customer retention.

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We have achieved strong and healthy financial performance while preserving a stable asset quality during our growth.

On account of our superior operational execution, broad range of products, expansion in our geographical reach and the resulting increase in market penetration through our extensive branch network, our assets grew from Rs. 21,113.7 billion as of March 31, 2022 to Rs. 25,755.6 billion as of March 31, 2023. On July 1, 2023, HDFC Limited merged with and into us and the acquired assets were Rs. 12,273.1 billion and our combined assets stood at Rs. 44,118.6 billion as of March 31, 2024. Our net interest margin was 4.4 percent in fiscal year 2023 and 3.8 percent in fiscal year 2024. Our net interest margins decreased in fiscal year 2024 as a result of the Transaction because HDFC Limited had a relatively lower-yielding asset product mix and a relatively higher cost of funds compared to the Bank. Our total deposits stood at Rs. 23,768.2 billion as of March 31, 2024 and current and savings account deposits as a percentage of our total deposits were 38.1 percent as of March 31, 2024. The strong current and savings account profile that we had prior to the Transaction enables us to tap into a low-cost funding base. The deposit base we acquired in the Transaction was comprised entirely of relatively higher-cost term deposits. We believe that we can additionally tap into the acquired customer base, a significant part of which did not bank with us as of the date of completion of the Transaction, and to whom we can offer our low-cost deposit products. The housing loan portfolio, comprising secured and long-tenure products, acquired in the Transaction strengthens our robust asset portfolio mix. In addition to the significant growth in our assets and net revenue, we remain focused on maintaining a healthy asset quality. We continue to have low levels of non-performing customer assets as compared to the average levels in the Indian banking industry. Our gross non-performing customer assets as a percentage of total customer assets was 1.2 percent as of March 31, 2024. Our net income has increased from Rs. 495.4 billion for fiscal year 2023 to Rs. 622.7 billion for fiscal year 2024. Net income as a percentage of average total shareholders’ equity reduced by goodwill and intangible assets was 19.3 percent in fiscal year 2023 and 15.3 percent in fiscal year 2024 and net income as a percentage of average total tangible assets was 2.2 percent in fiscal year 2023 and 1.8 percent in fiscal year 2024. We believe the combination of healthy net income growth, strong deposit-taking, low-cost deposit products and prudent risk management has enabled us to generate attractive returns on capital.

We continue to advance our technology platforms.

Information technology and our advanced platforms are key enablers of the Bank, driving innovation, customer satisfaction and efficiency across all operations. Over the past years, we have made significant strides in enhancing our IT infrastructure, including modernizing our core systems, enhancing our digital channels, and leveraging data analytics. These advancements aim to ensure seamless and secure transactions for our customers. Our commitment to cutting-edge technology has given us a competitive edge, enabling us to offer tailored solutions and personalized experiences at every customer touchpoint. Our focus on digital transformation, data analytics, and cybersecurity has not only improved operational efficiency but also strengthened customer trust. By pioneering in cloud-native architectures such as a common landing zone we have achieved greater agility and scalability.

By leveraging advanced technologies, we have created a robust and scalable platform that supports our growth and adapts to evolving market demands. As we move forward, we believe our technology platforms and systems will continue to play a crucial role in delivering exceptional value to our customers and stakeholders, ensuring our Bank remains at the forefront of the industry.

We have an experienced management team

Our experienced management team is led by Mr. Sashidhar Jagdishan, who has been with our Bank since 1996 and who was appointed Managing Director and Chief Executive Officer of the Bank in October 2020. Formerly our Chief Financial Officer, Mr. Jagdishan was appointed as Change Agent in 2019. He was additionally responsible for legal and secretarial, human resources, corporate communication, infrastructure, administration and corporate social responsibility functions. Effective April 2023, Mr. Kaizad Bharucha, our former Executive Director, was appointed Deputy Managing Director, and Mr. Bhavesh Zaveri was appointed Executive Director. In connection with the Transaction, Mr. V. Srinivasa Rangan, former Director and Chief Financial Officer of HDFC Limited, was appointed Executive Director of the Bank, in November 2023. See also “

Management.

”

Our leadership team brings together a diversity of talent and a wealth of experience. Many of the members of our management have had a long tenure with us, which gives us a deep bench of experienced managers. They have substantial experience in banking or other industries and share our common vision of excellence in execution. Having a management team with such breadth and depth of experience is well suited to leverage the competitive strengths we have already developed across our large, diverse and growing branch network as well as allowing our management team to focus on creating new opportunities for our business. Additionally, the experienced leadership team of HDFC Limited has been integrated into our leadership team ensuring a seamless transition and operation of the erstwhile entity. As the world becomes increasingly digital, our management team intends to steer the Bank to leadership in this emerging domain with innovative products and services. See also “

Management

.”

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Our Business Strategy

Our business strategy emphasizes the following elements:

Future-Ready Strategy

The Indian economy is positioned for growth leading to an increase in the demand for financial products and services. The Transaction has further enriched our product suite with housing loans and a construction finance business. As we recognize the increasing shift towards digital transactions, we envision the transformation of retail branches into engagement centers with strategic imperatives like customer lifecycle engagement and AI Analytics-driven customer conversations, among other innovations. Our Virtual Relationship Management (“VRM”) channel provides enhanced customer engagement wherein new age technology powers human capability to provide what we believe to be a convenient, safe and seamless customer experience.

We continue to focus on Government agency business. We are a leading Government bank in collection of direct and indirect taxes. We have partnered with center, state, district and local level administrations leveraging technology to offer right fit solutions. We have facilitated digitalization of payments associated with the land acquisition process, facilitated transfer of funds from the Central Government to various beneficiaries under the aegis of various schemes, revamped product offering for defence pensioners and undertaken more initiatives in this business segment.

Innovation has been a constant theme across our Payments Business. We introduced several new products and payment platforms. The MyCards platform is a one stop platform for managing our credit cards, debit cards, consumer durable loans and FASTag. SmartHub Vyapar, an integrated payment, banking and business solution caters to the daily needs of merchants and helps them drive business growth. Given our franchise on the issuance as well as the acceptance side, our Bank also leverages its network of consumers and merchants to enable affordability solutions. We also have a consumer finance program helping consumers to purchase goods and service complimenting their lifestyle.

Our lending activities to MSMEs, transportation, agriculture and microfinance groups play a significant role in meeting our priority segment obligations. While we have presence across all states, we are now going granular to target districts. We also continue to pursue agricultural financing. We are digitizing customer touchpoints, document collection processes and sales service. We have enabled self-service digital capabilities across all our branches.

In the retail assets space, our strategy is to continually enhance digital offerings across all our retail assets, do this at prices attuned to our risk appetite and consistently maintain our portfolio quality. We expect to continue our focus on digital distribution and increase the unassisted sourcing through Xpress Personal Loan, Xpress Business Loan, Xpress Auto Loan, Loan Against Shares / Mutual Funds. We continuously strive to acquire new to bank customers with our wide range of asset offerings. The Transaction has enabled us to offer Housing loans to our existing and new customers. Post-merger, turnaround time has improved significantly. HDFC Limited’s strength of connecting with customers in person is an added benefit. Following the Transaction, we have launched and expanded our product basket through banking surrogate programs. We believe that the fundamental demand for housing will continue to be strong in the long run in India due to a favorable environment.

Within wholesale banking while our focus is on holistic corporate engagement, we are also focusing on new to bank acquisitions through engagement with large corporates, targeting Government undertakings and multinational corporations to expand our reach. We aim to capitalize on the Government infrastructure push and Production Linked Incentive scheme (“PLI”) which will open up incremental opportunity for the banking sector. We have also put in place a liability strategy to improve wallet share through our transaction banking solutions. We are on the path of strategic digital transformation by enhancing Employee Experience (“EX”), Customer Engagement (“CE”) and creating an ecosystem for seamless banking. We are enhancing Employee Experience through the launch of platforms enabling an end-to-end journey for the relationship managers, actionable analytics, pricing intelligence and dashboard automation. On the customer front, we are progressing on the path of shifting from a product focus to an ecosystem approach and investing in enabling ERP integration across functions. As part of our digital transformation strategy, we have launched the Supply Chain Finance (“SCF”) Underwriting & Onboarding platform to ease the anchor client’s counterparty onboarding process and provide credit decisioning in less than 30 minutes from application submission. The Transaction has enabled us to offer Construction Finance facilities mainly to well-established borrowers with a strong track record. This business largely covers the rental discounting business as well as construction finance. In addition to pure construction finance facility, we are also financing Greenfield under-construction commercial office space with developers having a proven track record. We expect the construction finance facilities to get converted into low-risk lease rental discounting facilities.

Digital Marketing plays a vital role in our overall marketing strategy. Digital is a platform where an increasing number of our customers spend their time. We have built a strong brand IP through Vigil Aunty – our own social media influencer, who creates awareness among customers about frauds and helps them to be aware of how to avoid them. Our digital marketing strategy has helped create brand love among the new and digitally savvy set of customers leading to increased brand awareness and brand loyalty for our financial solutions and services. The second key aspect which digital marketing delivers on is to create a strong digital first culture among both the employees of the Bank as well as its customers.

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Shift Right: A Customer-Centric Evolution

Our dedication to delivering personalized digital banking solutions and ensuring inclusive access to banking services underscores our mission to be a trusted partner for all our customers. As we continue to innovate and adapt, our “Shift Right” approach will guide us in building a resilient, forward-looking bank that remains steadfast in its commitment to excellence and customer satisfaction. The wave of digital transformation in finance has brought institutions closer to customers, from microfinance to large corporates and urban youth to agri and dairy farmers. Our Bank offers best-in-class products and services, shifting from a product-centric to a customer-centric approach. Our new “Shift Right” strategy leverages AI and ML to gain deeper customer insights, enhancing personalization while ensuring privacy and security. Modernized core systems and cloud-native architectures boost performance and secure access. An API orchestration layer ensures seamless integration across platforms. By supporting multiple engagement channels, we provide consistent, high-quality experiences and leverage Banking-as-a-Service to embed our offerings into preferred customer channels.

We have taken significant steps to enhance customer-centricity, leveraging technology to improve experiences and drive growth. Our digital transformation includes successful initiatives like PayZapp, SmartHub Vyapar, and Xpress Car Loan, as well as new services such as SmartWealth, BizXpress, Dukandar Dhamaka, and Smart Saathi. We continuously modernize our core banking infrastructure and utilize data analytics for deeper customer insights and innovations.

The Technology and Digital Transformation agenda is delivered via the Factory construct, comprising two foundational capabilities:

Digital Solutions Group (“DSG”)

: This integrated unit enhances collaboration between the Bank’s Business Channels/Product Teams and our Engineering Factories, along with other core technology teams, to enrich experiences and journeys with HDFC Bank products and services for existing and potential customers.

Enterprise Factory and Competencies

: This unit bridges core IT systems with the cloud-native experiences designed and built through the digital factory. It focuses on Data Engineering, API Factory, Credit Factory, Enterprise Factory In-House Applications (“IHA”), and Programs Delivery. This unit is also responsible for the end-to-end architecture of all applications, enabling experiences on the engagement layer through APIs and microservices, and advancing data engineering capabilities.

To further illustrate our commitment to tailored digital banking for all and customer-centric growth, we have successfully launched key products in the last financial year. These launches reflect our dedication to meeting the evolving needs of our diverse customer base and enhancing our service offerings.

•

PayZapp 2.0

: Building upon the success of its impactful launch in fiscal year 2023, PayZapp 2.0 has continued its growth to become one of the fastest growing payments apps providing customers with a seamless and intuitive user experience while providing enhanced security features.

•

Smart Hub Vyapar

: The one-stop business and banking solution has been designed and developed to serve the business needs of micro, small and medium enterprises (“MSMEs”). This comprehensive payments and banking solution continues to fulfill the everyday business needs of merchants, providing seamless digital solutions tailored to their requirements. With features like instant, digital and paperless merchant onboarding for HDFC Bank customers, interoperable payments across multiple payment modes, and remote payments, merchants benefit from the added convenience.

•

HDFC Bank One (Customer Experience Hub)

: HDFC Bank One (Customer Experience Hub), our AI/ML driven conversational bot has enhanced our contact center operations, centralizing and streamlining customer interactions. Expanding its reach across India, it covers various services, including Phone Banking, IVR self-service, virtual relationship management teams and tele-sales. With an omni-channel approach spanning WhatsApp chat banking, SMS banking, IVR, and agent-assisted services, it offers a seamless and unified customer experience.

•

Xpress Car Loans (“XCL”):

XCL, which is the first of its kind end-to-end digital lending journey platform in India, facilitates instant and hassle-free car loan disbursals to existing as well as new-to-bank customers. It is now the preferred auto loan channel with over 30 percent of the loans being processed through this journey in fiscal year 2024

It now facilitates zero paper, zero touch, 30-minute auto loan processing, including for new-to-bank customers. XCL continues to be the largest digital car loan platform for origination and disbursement in India.

•

Smart Saathi

: This is our digital distribution platform to connect business correspondents (“BCs”) and business facilitators (“BFs”) to the Bank. This initiative marks a significant milestone in our journey towards providing innovative solutions tailored to the evolving needs of customers. By leveraging this network of business correspondents and facilitators, we aim to enhance financial inclusion by extending banking products and services to the last mile.

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Increase our market share of India’s expanding banking and financial services industry

In addition to benefiting from the overall growth in India’s economy and financial services industry, we believe we can increase our market share by continuing to focus on our competitive strengths, including our strong brand, our diverse product offering and our extensive banking outlet and ATM networks, to increase our market penetration. We believe we can expand our market share by focusing on developing our digital offerings to target mass markets across India. We believe digital offerings will position us well to capitalize on growth in India’s banking and financial services sector, arising from India’s emerging middle class and growing number of bankable households. Our key indigenous digital products such as XCL, 10 Second Personal loans, digital loan against shares, and digital loan against mutual funds, among others, enable not only our existing customers but also new bank customers to avail loans in a seamless manner. These initiatives address the needs of the growing population of digital savvy customers. We believe we can also capture an increased market share by expanding our branch footprint, particularly by focusing on rural and semi-urban areas. As of March 31, 2024, we had 8,738 branches and 20,938 ATMs/CDMs in 4,065 cities and towns. In addition, we had 15,182 business correspondents, which were primarily manned by CSCs. In line with the Bank’s core value of product leadership, the Bank has significantly enhanced its process of managing the retail distribution franchise and its expansion by developing a scientific approach and using a “Distribution Planning Tool”. This data science tool combines data sources, including geo-spatial data on urbanization levels in India, credit bureau information on the presence of financial companies in an area and various internal data sources with a front-end data visualization solution. The Distribution Planning Tool has enabled the Bank to merge data-based insights with on-the-ground intelligence to take informed decisions on the expansion of distribution points (branches, ATMs/CDMs and business correspondents) at locations which carry high business potential across the country. We expect this approach to help optimize our expansion and increase our market share and profitability.

The Transaction further strengthens our positioning as a financial services conglomerate by adding insurance and mutual funds institutions as the Bank’s subsidiaries. Prior to the Transaction, we were a distributor for some of the products that we acquired as a consequence of the Transaction, such as insurance products and mutual funds. Now, we,

inter alia

, bring together significant complementarities that previously existed between our Bank and HDFC Limited and are poised to create meaningful value for our stakeholders from increased scale, comprehensive product offering, balance sheet resiliency and ability to drive synergies across revenue opportunities, operating efficiencies and underwriting efficiencies.

Following the successful completion of the Transaction, we believe that we will be able to grow our housing loan portfolio and enhance our existing customer base, benefiting from acquired technological capabilities to evaluate the credit worthiness of customers and acquired offices to market our products and services across India. The housing market environment has changed with recent laws bringing in greater transparency. HDFC Limited’s secured and long-tenure products are expected to strengthen our robust asset portfolio mix. Home loan customers are typically retained for a longer time than other retail customers, and we are now able to offer products and services to a sizeable customer base that we acquired as a consequence of the Transaction, a significant part of which did not bank with us as of the date of completion of the Transaction. The rural and affordable housing lending portfolio that we acquired from HDFC Limited is expected to qualify as priority sector lending for us and may enable a higher flow of credit into priority sector lending.

Continue our investments in technology to support our digital strategy

As we continuously improve and modernize our core banking applications and information technology infrastructure, we have reinforced our technology and innovation know-how by undertaking key initiatives such as:

•

Digital Rupee:

HDFC Bank is participating in the RBI’s Digital Rupee Pilot Program. The Central Bank Digital Currency (“CBDC”), or Digital Rupee as it is popularly known, is the digital, secure, faster, and more inclusive version of the paper-note Indian Rupee, which strengthens privacy as the personal information of the payer is not exposed upon making payments. While its impact on the Bank’s financial performance in fiscal year 2024 was limited, the CBDC initiative promises substantial long-term benefits. The CBDC makes a strong case for fostering financial inclusion, reducing operational costs of physical cash management and inducing resilience, efficiency and innovation in payment systems.

•

UPI 2.0 Autopay:

United payment interface (“UPI”) Autopay is a feature that allows users to set up a mandate on recurring payment automation. The use cases include bill payment, school fees, OTT Subscription, Insurance premium, EMI Repayment and Mutual Funds, among others, for which regular collection by the merchant is required. It is simple and it allows timely and reliable payment for users. It helps customers avoid late fee charges and disconnections, thereby playing a pivotal role in customer retention, and benefiting merchants.

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UPI Secondary ASBA:

UPI Secondary ASBA, also called Single Block Multiple Debit is a payment mechanism that allows investors to block their funds within their bank accounts towards a definite purchase of a financial instrument. This blocking mechanism is driven on UPI railroad and allows users to have simple, secure and convenient transactions. HDFC Bank is one of the pioneer banks to extend a UPI Secondary ASBA feature offering.

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Cross-sell our broad financial product portfolio across our customer base

We are able to offer our complete suite of financial products across our network, including in rural locations. Further, as a result of the Transaction we have acquired a significant customer base that did not bank with us as of the completion date, and to whom we can offer our products and services. By matching our broad customer base with our ability to offer our complete suite of products (from banking to insurance and mutual funds, through our subsidiaries) to both rural and urban customers, we believe that we can continue to generate organic growth by cross-selling different products by proactively offering our customers complementary products as their relationships with us develop and their financial needs grow and evolve. For example, following the successful completion of the Transaction, we have witnessed a notable increase in cross-selling of savings accounts to incremental new-to-Bank housing loan customers, leading to a higher stickiness quotient of such customers and laying the foundation for a stronger digital connection with them.

Maintain strong asset quality through disciplined credit risk management

We have maintained high-quality loan and investment portfolios through careful targeting of our customer base, and by putting in place what we believe are comprehensive risk assessment processes and diligent risk monitoring and remediation procedures. Asset quality on the loan portfolio acquired from HDFC Limited remained stable. Our gross non-performing customer assets as a percentage of gross customer assets was 1.2 percent as of March 31, 2024. We believe we can maintain strong asset quality appropriate to the loan portfolio composition while achieving growth.

Maintain a low cost of funds

We believe we can maintain a relatively low-cost funding base, by leveraging our strengths and expanding our base of retail savings and current deposits and increasing the free float generated by transaction services, such as cash management and stock exchange clearing. The strong current and savings account profile that we had prior to the Transaction continues and enables us to tap into a low-cost funding base. We believe that we can additionally tap into the acquired customer base, a significant part of which did not bank with us as of the completion date, and to whom we can offer our low-cost deposit products. Our non-interest-bearing current and low-interest-bearing savings account deposits were 38.1 percent of our total deposits as of March 31, 2024. Our average cost of funds (including equity) was 3.5 percent in fiscal year 2023 and 4.0 percent in fiscal year 2024. HDFC Limited had a relatively higher cost of funds compared to the Bank resulting in higher average cost of funds for fiscal year 2024.

Embed ESG principles within our wider business strategy

We include environmental, social and governance (“ESG”) factors in our business strategy, including in the design of our products and services and the implementation of our processes and policies. Our ESG strategy, which seeks to create value for all stakeholders, focuses on climate change, community and society, along with certain practices related to customers and suppliers, lending, procurement and governance. We have a board-level Corporate Social Responsibility and ESG Committee with oversight of our sustainability and climate change initiatives, and the Board has approved an ESG policy framework to identify and mitigate the Bank’s climate change-related risks. In fiscal year 2022, we committed to become carbon neutral with respect to direct emissions from our operations by fiscal year 2032 and are putting in place an implementation framework to achieve carbon neutrality, including continuing our investments in renewable energy and energy efficiency projects to lower our carbon footprint. Other initiatives to reduce ESG risks include initiatives in digital banking, contributions to tree planting targets, green building, managing greenhouse gas emissions through various initiatives, including those to reduce paper consumption across the Bank, the use of renewable energy, the adoption of green tariffs and a reduction in energy consumption.

With increasing focus on formalizing climate change risk management and enhancing related disclosures, some stakeholders are also placing more emphasis on financial institutions’ actions and investment decisions in respect of ESG matters. We continue to monitor the impacts of climate change risks on our business, including as the result of regulatory developments, changing market practices and the transition to a low carbon economy, and to accelerate the development of our climate risk management capabilities. Developments in data collection and assessment methodologies are expected to continue to help improve and enhance our measurement and reporting of climate change risks and financed emissions. We are exploring frameworks to model and assess climate risks. We also continue our efforts to acquire granular data and test tools for climate risk assessments and to adopt suitable methodologies to analyze exposures under different climate scenarios through suitable partnerships—including exploring options to tie up or collaborate with data providers.

The evaluation of environmental and social (“E&S”) risks is also an integral part of our overall credit appraisal and approval process. Loans in excess of Rs. 1 billion are subject to the Bank’s ESG Risk Management Framework for Lending, wherein a detailed E&S assessment is undertaken. This framework requires an assessment of environmental, health, social, safety and climate change risks, in addition to other risks, as part of the overall credit appraisal process. In particular, wholesale borrowers with a direct customer risk greater than Rs. 1 billion across facilities are subject to a detailed E&S due diligence assessment as part of the Credit Appetite Memorandum, while exposures up to Rs. 500 million are subject to an abridged E&S due diligence. In addition, we are increasingly emphasizing green financing solutions and tailoring the Bank’s portfolio towards climate-sensitive financing and companies with appropriate risk assessment systems and processes.

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Our Principal Business Activities

Our principal business activities consist of retail banking, wholesale banking, treasury services and insurance services. The following table sets forth our net revenue, comprising net interest revenue after provision for credit losses and net non-interest revenue attributable to each area for the last three fiscal years:


	Years ended March 31,
	2022				2023				2024
	(in millions, except percentages)
Retail banking	Rs.	640,670.1	71.8	%	Rs.	808,952.1	71.5	%	Rs.	960,249.9	US$	11,522.2	51.8	%
Wholesale banking		235,811.3	26.4	%		305,947.4	27.1	%		325,808.4		3,909.4	17.6	%
Treasury services		15,952.8	1.8	%		16,261.7	1.4	%		32,497.2		389.9	1.8	%
Insurance services										504,724.6		6,056.2	27.2	%
Others										30,591.1		367.1	1.6	%
Net revenue	Rs.	892,434.2	100.0	%	Rs.	1,131,161.2	100.0	%	Rs.	1,853,871.2	US$	22,244.8	100.0	%

We derive almost all of our revenue from our operations in India. Our revenue from our overseas operations is immaterial.

Retail Banking

Overview

We consider ourselves a one-stop shop for the financial needs of our customers. We provide a comprehensive range of financial products including deposit products, loans, credit cards, debit cards, payment wallets, third-party mutual funds and insurance products, bill payment services and other services. Our retail banking loan products include loans to small and medium enterprises for commercial vehicles, construction equipment and other business purposes. We group these loans as part of our retail banking business considering, among other things, the customer profile, the nature of the product, the differing risks and returns, the market segment, our organization structure and our internal business reporting mechanism. Such grouping ensures optimal utilization and deployment of specialized resources in our retail banking business. Since completion of the Transaction, we are now directly engaged in providing housing loans. We also have specific products designed for lower-income individuals through our Sustainable Livelihood Initiative. Through this initiative, we reach out to the un-banked and under-banked segments of the Indian population in rural areas. We actively market our services through our banking outlets and alternate sales channels, as well as through our relationships with automobile dealers and corporate clients. We follow a multi-channel strategy to reach out to our customers bringing to them choice, convenience and what we believe to be a superior experience. Innovation has been the springboard of growth in this segment and so has a strong focus on analytics and customer relationship management, which we believe has helped us to understand our customers better and offer tailor-made solutions. We further believe that these factors lead to better customer engagement. Our newly launched digital platform, HDFC Bank XpressWay offers a range of products and services digitally. It currently offers over 30 banking products, including loans, credit cards, account opening, investments, pre-approved banking offers as well as multiple value-added services.

As of March 31, 2024, we had 8,738 branches and 20,938 ATMs/CDMs in 4,065 cities and towns, including the branches acquired pursuant to the Transaction. In addition, we had 15,182 business correspondents, which were primarily manned by CSCs. We also provide telephone, internet and mobile banking to our customers. We plan to continue to expand our banking outlet and ATM network as well as our other distribution channels, subject to regulatory guidelines/approvals.

Retail Loans and Other Asset Products

We offer a wide range of retail loans, including loans for the purchase of automobiles, personal loans, retail business banking loans, loans for the purchase of commercial vehicles and construction equipment finance, housing loans, two-wheeler loans, credit cards and loans against securities. Our retail loans, of which 18.1 percent were unsecured, constituted 73.1 percent of our gross loans as of March 31, 2024. Apart from our banking outlets, we use our ATMs, telephone banking, internet banking and mobile banking to promote our loan products. We perform our own credit analysis of the borrowers and the value of the collateral if the loan is secured. See “

—Risk Management—I. Banking—Credit Management—Retail Credit

.” We also buy mortgage and other asset-backed securities and invest in retail loan portfolios through assignments. In addition to taking collateral, in most cases we obtain debit instructions/post-dated cheques covering repayments at the time a retail loan is made. It is a criminal offense in India to issue a bad cheque. Our unsecured personal loans, which are not supported by any collateral, are a greater credit risk for us than our secured loan portfolio. We may be unable to collect in part or at all on an unsecured personal loan in the event of non-payment by the borrower. Accordingly, personal loans are granted at a higher contracted interest rate since they carry a higher credit risk as compared to secured loans. See also “

Risk Factors—Credit Risks—Our unsecured loan portfolio is not supported by any collateral that could help ensure repayment of the loan, and in the event of non-payment by a borrower of one of these loans, we may be unable to collect the unpaid balance

.”

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The following table shows the gross book value and percentage share of our retail credit products:


	At March 31, 2024
	Value (in millions)				% of Total Value
Retail Assets:
Auto loans	Rs.	1,378,523.1	US$	16,541.0		7.0
Personal loans/Credit cards		3,119,246.7		37,428.0		15.9
Retail business banking		4,207,836.2		50,490.0		21.5
Commercial vehicle and construction equipment finance		1,619,602.9		19,433.7		8.3
Housing loans		6,993,168.0		83,911.3		35.7
Other retail loans		2,272,031.2		27,262.1		11.6
Total retail loans	Rs.	19,590,408.1	US$	235,066.1		100.0

Auto Loans

We offer loans at fixed interest rates for financing of new and used car purchases, including electric vehicles, which have gained significant popularity in recent years. In addition to our general promotional efforts, we specifically market our offerings at various customer touch points such as authorized original equipment manufacturers, dealer showrooms and outlets, authorized direct sales agents and our banking outlets, as well as actively cross-selling these products through other lending businesses of the Bank. We also market our products through outbound and inbound calls with customers, as well as through the bank’s digital touch points. Having established our presence in this business over the last two decades, we believe we have consistently been a market leader and are well-equipped to serve the entire automobile ecosystem, including original equipment manufacturers, dealers and end-customers.

Personal Loans and Credit Cards

We offer unsecured loans at fixed rates to salaried individuals, self-employed professionals, small businesses and individual businessmen.

We offer credit cards on VISA, MasterCard, Diners Club and RuPay platforms under the classification of corporate cards, business cards, co-brand cards, premium retail cards and super premium retail cards. We had approximately 17.5 million and 20.6 million cards outstanding (i.e., total credit cards in circulation) as of March 31, 2023 and March 31, 2024, respectively.

We offer easy equated monthly instalments (“Easy EMI”) through consumer durable loans and cardless EMI. Consumer durable loans and Cardless EMI are available at no extra cost across multiple product categories under multiple brands.

Our efforts in the payments business are continuously focused on meeting customers’ specific requirements in the most accessible and relevant manner, while simplifying transactions.

In November 2020, a power failure at our primary data center caused outages in our internet banking, mobile banking, and payment systems. The RBI then temporarily halted our Digital 2.0 program and new credit card sourcing on December 2, 2020, and appointed a third-party auditor. Following the audit, the restrictions were partially lifted in August 2021 and fully removed in March 2022. See also “

Risk Factors

—

Technology Risks

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A failure, inadequacy or security breach in our information technology and telecommunication systems may adversely affect our business, results of operations or financial condition

.”

We have adopted preventive measures to strengthen our IT infrastructure and mitigate the risks of outages. Some of the key initiatives undertaken include the migration of core data centers in Bengaluru and Mumbai to state-of-the-art facilities, which has reinforced our capability to switchover more than 100 critical and not so critical (Application Availability Rating 3 & 4) applications within 30 to 120 minutes, when needed. The facilities have significantly enhanced our already resilient backbone by providing the Bank with a scalable and reliable infrastructure.

The Active-Active architecture further improves the availability and resilience of our applications. We have nine critical applications for which Active-Active architecture has been implemented. With this mechanism in place, data is replicated to both primary and secondary sites at the same time, which allows for a seamless failover to the secondary site in a very short time.

As part of our Hybrid-Cloud strategy, we have successfully implemented an industry-first common landing zone across leading cloud service providers (“CSPs”). This creates a secure and streamlined environment for all cloud deployments in the future by leveraging the scalability of cloud systems as needed. It facilitates distribution of workload across multiple CSPs by seamlessly switching between providers, which allows for an uninterrupted service. This streamlined environment also enhances our operations and management practices by providing a unified view of cloud resources, which enable centralized governance, monitoring and tracking.

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The capacity of UPIs has grown threefold over the last three years, and the net banking and mobile banking capacity, along with its integrated applications like OBP and V+, has been expanded to manage 90,000 users concurrently. This has been a significant step as most of our customers now rely on our digital channels for banking needs. DR drills have been completed for all critical payment systems and upgrades in network and security have been carried out. In addition, we have intensified our DR drills for critical applications and intend to further strengthen our DR processes and capabilities through (a) a focus on reducing Recovery Time Objective (“RTO”) for key applications to 40-60 minutes, which has been completed for critical applications as planned, (b) deep automation to improve configuration drift management between primary and DR sites, (c) enrichment of existing automation tools for DR to cover all scenarios and further reduce RTO time, and (d) refactoring key applications into an “Active-Active” always available design.

For more information on our cybersecurity framework, see “

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Cybersecurity

”.

Retail Business Banking

We address the borrowing needs of the community of small businessmen primarily located within the servicing range of our banking outlets by offering facilities such as credit lines, term loans for expansion or addition of facilities and discounting of receivables. We classify these business banking loans as a retail product. Such lending is typically secured with current assets as well as immovable property and fixed assets in some cases. We also offer letters of credit, guarantees and other basic trade finance products, foreign exchange and cash management services to such businesses.

Commercial Vehicles and Construction Equipment Finance

We have a strong market presence in the commercial vehicle and construction equipment financing businesses. We offer a wide range of banking products across the country which can be customized to the individual needs of our customers.

We provide secured financing for a full range of commercial vehicles and construction equipment along with working capital, trade advances, bank guarantees, and transaction banking products and services, among others, both traditional and digital, to companies active in the infrastructure, logistics and transportation industries. In addition to funding domestic assets, we also extend financing for imported assets for which we open foreign letters of credit and offer treasury services, including forex and forward exchange covers. We have an excellent relationship with most leading original equipment manufacturers, together with whom we collaborate to promote and market financing options.

Housing Loans

Prior to the Transaction, we provided home loans through an arrangement with our principal shareholder HDFC Limited, under which we sourced loans for HDFC Limited through our distribution channels. The loans were booked by HDFC Limited and we had a right, but not an obligation, to purchase up to 70.0 percent of the home loans sourced under this arrangement. Upon completion of the Transaction, on July 1, 2023, we acquired a housing loans portfolio of Rs. 5,241.9 billion from HDFC Limited. There has been a smooth and seamless integration of this business into our Bank. We are now directly engaged in financing the purchase and construction of residential houses. We offer a wide range of loans at floating interest rates to low, middle and high income salaried and self-employed segments, including professionals, for the financing of housing property purchases through builders and development authorities, resales and own construction, residential plot purchases and construction thereon. We also offer loans to extend or add space to existing homes and to carry out enhancements or renovations of existing homes. We also cater to the affordable housing and rural housing segments. Our primary objective is to enhance the residential housing stock in India through the provision of housing finance in a systematic and professional manner, and to promote home ownership.

In addition to our general promotional efforts, we specifically market our product and customer offerings at various customer touch points such as our banking outlets authorized direct sales agents and, through other lending businesses of the Bank. We also market our products through outbound and inbound calls with customers, as well as through the bank’s digital touch points. Having established our presence in this business over four decades, we believe we have consistently been a market leader and are well-equipped to serve the housing finance needs of customers across all segments.

Other Retail Loans

Two-Wheeler Loans

We offer loans for financing the purchase of mopeds, scooters and motorcycles, including electric vehicles, which have gained significant popularity in recent years. We market this product in ways similar to our marketing of automobile loans.

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Loans Against Securities