HDFC Bank Directors Report, HDFC Bank Reports by Directors


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Directors Report Year End : Mar '16    Mar 15
The Directors take great pleasure in presenting the 22nd Annual Report
 on the business and operations of your Bank, together with the audited
 accounts for the year ended March 31, 2016.
 It''s been a transformational year for your Bank in more ways than one.
 Led by a slew of digital innovations, many of them pioneering and
 several initiatives in rural India, your Bank was able to cement its
 position as a premier Bank across markets, from metros to the
 hinterland. The Bank''s singular Endeavour to offer an agnostic customer
 experience across all its geographies has enabled it to garner not just
 substantial mindshare but also market share.
 Your Bank has also contributed as a corporate citizen substantially
 through its Sustainable Livelihood Initiative, which skills those at
 the Bottom of the Pyramid and enables them to earn a livelihood by
 providing capital and in the process substituting usurious lending by
 the unorganized financial sector. Through its CSR programme, your Bank
 is helping create sustainable communities.  These initiatives helped
 the larger society bond better with the Bank. They were also
 instrumental in establishing your Bank as India''s Most Valuable Brand
 for the 2nd consecutive year in a study conducted by Millward Brown, a
 leading global research agency specializing in media and brand equity
 research and a part of communications group WPP.
 While the Bank''s operations complemented by new initiatives during the
 year led to higher revenues and profitability, its traditional prudence
 ensured that it did not come at the cost of asset quality.
 Summary of Financial Performance
                                                  (Rs, crore)
 Particulars                          For the year ended / As on
                                  March 31, 2016     March 31, 2015
 Deposits and Other Borrowings         599,442.7          496,009.2
 Advances                              464,594.0          365,495.0
 Total Income                           70,973.2           57,466.3
 Profit Before 
 Depreciation and Tax                   19,343.8           15,985.0
 Profit After Tax                       12,296.2           10,215.9
 Profit Brought Forward                 18,627.8           14,654.2
 Total Profit Available 
 for Appropriation                      30,924.0           24,870.1
 Transfer to Statutory Reserve           3,074.1            2,554.0
 Transfer to General Reserve             1,229.6            1,021.6
 Transfer to Capital Reserve               222.2              224.9
 Transfer to / (from) 
 Investment Reserve                         (8.5)              27.5
 Proposed Dividend                       2,401.8            2,005.2
 Tax Including Surcharge 
 and Education cess on  
 Dividend                                  488.9              408.2
 Dividend (including tax / 
 cess thereon) pertaining 
 to previous year
 paid during the year,                     (11 7)               0 8
 net of dividend tax 
 credits .
 Balance carried over 
 to Balance Sheet                       23,527.6           18,627.8
 The Bank posted total income and net profit of Rs, 70,973.2 crore and
 Rs, 12,296.2 crore respectively for the year ended March 31, 2016 as
 against Rs, 57,466.3 crore and Rs, 10,215.9 crore respectively for the
 year ended March 31, 2015.  Appropriations from net profit have been
 effected as per the table given above.
 Your Bank has had a dividend policy that balances the dual objectives
 of appropriately rewarding shareholders through dividends and retaining
 capital in order to maintain a healthy capital adequacy ratio to
 support future growth. It has had a consistent track record of steady
 increase in dividend distribution over its history with the dividend
 pay-out ratio ranging between 20-25 per cent. Consistent with this
 policy and in recognition of the overall performance during this
 financial year, your Directors are pleased to recommend a dividend of
 Rs, 9.50 per equity share of Rs, 2 for the year ended March 31, 2016 as
 against Rs, 8 per equity share of Rs, 2 for the year ended March 31,
 2015.  This dividend shall be subject to tax on dividend to be paid by
 the Bank.
 Instrument          Rating            Rating Agency
 Fixed Deposit       CARE AAA (FD)     CARE Ratings
                     IND Taaa          India Ratings
 Certificate of 
 Deposits            CARE A1           CARE Ratings 
                     IND A1            India Ratings
 Long term 
 unsecured,          CARE AAA          CARE Ratings
 (Lower Tier 2) 
                     IND AAA           India Ratings
 Tier 1 
 Perpetual Bonds     CARE AAA          CARE Ratings
                     CRISIL AAA        CRISIL
 Upper Tier 2 
 Bonds               CARE AAA          CARE Ratings
                     CRISIL AAA        CRISIL
 Bonds               CARE  AAA         CARE Ratings
                     CRISIL AAA        CRISIL
 Instrument       Comments
 Fixed Deposit    Instruments with this rating are considered to have 
 Programme        very strong degree of safety regarding timely 
                  payment of financial obligations.  Such instruments 
                  carry lowest credit risk.
                  Instruments with this rating are considered to have 
                  very strong degree of safety regarding timely payment
                  of financial obligations.  Such instruments carry
                  lowest credit risk.
 Certificate of   Instruments with this rating are considered to have 
 Deposits         very strong degree of safety regarding timely 
 Programme        payment of financial obligations.  Such
                  instruments carry lowest credit risk.
                  Instruments with this rating are considered to have
                  very strong degree of safety regarding timely
                  payment of financial obligations.  Such
                  instruments carry lowest credit risk.
 Long term        Instruments with this rating are considered to have
 Unsecured,       the highest degree of safety regarding timely 
 Suborinated      servicing of financial obligations.  Such
 (Lower Tier 2)   instruments carry lowest credit risk.
                  Instruments with this rating are considered to have
                  the highest degree of safety regarding timely 
                  servicing of financial obligations.  Such
                  instruments carry lowest credit risk.
 Tier 1 Perpetual Instruments with this rating are considered to have
 Bonda            the highest degree of safety regarding timely
                  servicing of financial obligations.  Such
                  instruments carry lowest credit risk.
                  Instruments with this rating are considered to have
                  the highest degree of safety regarding timely 
                  servicing of financial obligations.  Such
                  instruments carry lowest credit risk.
 Upper Tier 2     Instruments with this rating are considered to have 
 Bonda            the highest degree of safety regarding timely 
                  servicing of financial obligations.  Such
                  instruments carry lowest credit risk.
                  Instruments with this rating are considered to have
                  the highest degree of safety regarding timely 
                  servicing of financial obligations.  Such
                  instruments carry lowest credit risk.
 Infrastructure   Instruments with this rating are considered to have
 Bonds            the highest degree of safety regarding timely 
                  servicing of financial obligations.  Such
                  instruments carry lowest credit risk.
                  Instruments with this rating are considered to have
                  the highest degree of safety regarding timely 
                  servicing of financial obligations.  Such
                  instruments carry lowest credit risk.
 Issuance of Equity Shares
 During the year under review, 2,16,91,200 equity shares were allotted
 to the employees of your Bank in respect of the equity stock options
 exercised under the Employee Stock Option schemes.  As on March 31,
 2016, the issued, subscribed and paid-up capital of your Bank stood at
 Rs, 5,056,373,034 comprising 2,52,81,86,517 equity shares of Rs, 2 each.
 Employee Stock Options
 The information pertaining to Employee Stock Options is given in
 ANNEXURE 1 to this report.
 Capital Adequacy Ratio
 Your Bank''s total Capital Adequacy Ratio (CAR) calculated in line with
 Basel III capital regulations stood at 15.5 per cent, well above the
 regulatory minimum of 9 per cent. Of this, Tier I CAR was 13.2 per
 Subsidiary Companies
 Your Bank has two subsidiaries, HDB Financial Services Limited
 (''HDBFS'') and HDFC Securities Limited (''HSL'').
 HDB Financial Services Limited
 HDBFS is a non-deposit taking non-bank finance company (''NBFC''). The
 customer segments being addressed by HDBFS are typically underserviced
 by larger commercial banks, and thus create a profitable niche for the
 company. Apart from lending to individuals, the company grants loans to
 micro, small and medium business enterprises. It also operates call
 centre''s for collection services to the Bank''s retail loan products.
 During the year ended March 31, 2016, the company''s total income
 increased by 31 per cent to Rs, 3,302 crore as compared to Rs, 2,527.3
 crore in the previous year. During the same period, the company''s net
 profit after tax grew by 52.9 per cent to Rs, 534.4 crore compared to Rs,
 349.5 crore in the previous year.
 HDBFS offers its loan and asset finance products through its branches
 and digital and assisted channels. It has 929 branches in 623 cities.
 As on March 31, 2016, your Bank held 97.1 per cent stake in HDBFS.
 A Scheme of Amalgamation has been proposed for the amalgamation of
 Atlas Documentary Facilitators Company Private Limited and HBL Global
 Private Limited (associates of the Bank) with HDBFS. Necessary
 procedures have been initiated in this regard and are pending as on the
 date of this Report.
 HDFC Securities Limited
 HDFC Securities Limited (HSL) is among India''s largest retail broking
 firms and offers a large bouquet of financial services.  As on March
 31, 2016, your Bank continued to hold 97.9 per cent stake in HSL.
 HSL increased its physical distribution network by a further 12
 branches during the year, taking the total to 262 branches across 189
 cities in the country. During the year under review, HSL''s total income
 amounted to Rs, 401.6 crore as against Rs, 417 crore in the previous year.
 During the same period, the net profit after tax was Rs, 133.3 crore
 compared to Rs, 165 crore in the previous year.
 During the year under review, HSL won the prestigious IDC Insights
 Award 2015 for Excellence in Customer Experience in the BFSI category
 and the Digital Business Leader Award for Best CRM Implementation. It
 was adjudged runner up in the Best e-Brokerage category at the Outlook
 Money Awards 2015.
 The annual reports of HDBFS and HSL are available on the website of the
 Bank. Shareholders who wish to have a copy of the annual accounts and
 detailed information on HDBFS and HSL may write to the Bank. These
 documents shall also be available for inspection by shareholders at the
 registered offices of the Bank, HDBFS and HSL.
 Corporate Social Responsibility - Building Sustainable Communities
 Building sustainable communities especially in rural India is a core
 CSR objective of the Bank. Your Bank has identified Integrated Rural
 Development as a vehicle for socio-economic change and community
 building. This encompasses Education, Sanitation, Skill Development and
 Livelihood Creation. Within these broad areas, particular focus is to
 impart financial literacy / inclusion and sanitation. The recipients of
 these interventions are primarily women from the marginal sections of
 The Integrated Rural Development Programme (IRDP) is spread across
 diverse geographies ranging from the arid regions of Marathwada in
 Maharashtra to the wet lands of Meghalaya.
 In the endeavour to create sustainable livelihood, the Bank promotes
 activities that are economically empowering while keeping in mind the
 socio-economic context and the ecology of the region. These include
 providing assistance to villages in soil and water conservation, water
 management, construction, renovation and maintenance of water
 harvesting structures for improving surface and ground water
 availability, in partnership with the Village Development Committees.
 Soil and water conservation work has been initiated in 550 acres of
 land (covering over 140 farmer families) with 65 acres brought under
 irrigation for the first time and 45 acres brought under assured
 irrigation.  In one such intervention in Madhya Pradesh, the
 development of a cluster of seven villages situated in Mandla district
 has been undertaken. This region is home to a significant tribal
 population, which is largely cut off from mainstream development.
 Similar programmes are in progress at Maharashtra and Chhattisgarh.
 Raigarh in Maharashtra is a case in point, where ESR (Elevated Storage
 Reservoir) has been provided which ensures that every house has a water
 connection. Your Bank has also installed solar street lights which
 benefit the entire community especially women / girls as they face
 difficulties in venturing out after sunset.
 Since economic and social empowerment are the end objective of the
 development interventions, the Bank''s CSR efforts are reinforced by its
 direct intervention on financial inclusion and literacy, thereby
 creating economically sustainable communities.  The disclosures as
 required under Rule 8 of the Companies Act (Accounts) Rules, 2014 have
 been given at ANNEXURE 2 to this report.
 Skill Development and Livelihood
 The livelihood initiatives of the Bank centre around providing training
 and capacity development to youth and women from sections of society
 that have no access to formal education.  The support programmes are
 aimed at providing competency- based, skill-oriented technical and
 vocational training.  With various combinations of initiatives based on
 agriculture and allied businesses, your Bank has supported more than
 4,000 households, trained more than 500 youth on different trades
 enabling them to be entrepreneurs. Another 600 have been trained to
 become employable. In 2015-16 alone, the Bank trained over 85,000
 people through the Sustainable Livelihood Initiative.
 In 2015-16, your Bank initiated a pilot programme in skill development:
 The National University Students Skill Development Programme in
 association with the Tata Institute of Social Sciences which focuses on
 increasing employability of university students by imparting knowledge
 and skills that make them job ready. The students are trained and
 certified in vocational skills in addition to their university graduate
 degree.  There is also a need to ensure that a minimum 80 per cent of
 the students secure jobs on completion of graduation.  About 4,200
 students have undergone such training.
 Your Bank has also initiated entrepreneurship and youth skills
 development programme in the villages around Bilaspur and Ponsara in
 Chhattisgarh which provide training in the fields of IT enabled Skills
 (ITeS), Industrial Electrician and Agriculture.
 Education is the key to initiating change. Keeping this in mind,
 programmes are structured to ensure that the children are provided with
 basic infrastructure to create a conducive learning environment to
 acquire quality education. Continuing with its mission to provide clean
 sanitation in schools, your Bank has covered over 850 such institutions
 in more than 500 villages across Chhattisgarh, Gujarat, Haryana,
 Maharashtra, Madhya Pradesh, Meghalaya, Punjab and Rajasthan.  In
 addition to construction of toilets, the Bank has tied up with over 10
 NGO partners to implement a behavioural change programme which is
 oriented towards hygiene. The School Management Committee is encouraged
 to take ownership of maintaining the units. The interventions under
 WASH (Water Sanitation and Hygiene) have also addressed the need for
 clean drinking water in schools.
 In addition to this, 30,000 students have benefited from an on-going
 programme of financial literacy, offered with a partner NGO in 300
 schools of Chhattisgarh and Bihar. Some other key initiatives under
 education are teachers training, learning camps and career guidance
 programmes. In one such programme, your Bank has undertaken the
 challenging task of implementing an innovative programme ''Zero
 Investment Innovation in Education Initiative'' across schools in Uttar
 Pradesh to encourage low cost innovation. The first phase has seen over
 2 lakh teachers oriented on this concept with over 1 lakh innovative
 ideas submitted. Twenty five shortlisted ideas will be recognized and
 implemented across the state run schools in Uttar Pradesh.
 Environment Sustainability
 Maintaining a balance between the natural capital and communities is
 now integral to the Bank''s functioning.  Towards this end, Bank''s ATMs
 have gone paperless, enabling reduction of carbon footprint. The Bank
 has given this effort a further fillip by ensuring multichannel
 delivery through NetBanking, PhoneBanking and MobileBanking. This
 reduces carbon emission from operations as well as on account of
 reduced customer travel requirements. Another source for reducing the
 environmental footprint is solar ATMs. These use rechargeable Lithium
 Ion batteries that bring down the consumption of power generated using
 conventional sources.
 Blood Donation Campaign
 The ninth year of Blood Donation campaign witnessed unprecedented
 participation with more than 1.75 lakh individuals contributing nearly
 1.5 lakh units of blood.  The campaign recorded highest participation
 in terms of number of cities, number of camps and number of colleges in
 the year under review. Apart from branch and college level camps, the
 Bank also tied up with Corporate and Defence establishments to organize
 camps on their premises, thus increasing the reach and spread of this
 social campaign.
 Financial Inclusion
 It is well accepted that increased financial inclusion leads to
 enhanced GDP growth. The potential in India is especially enormous as
 40 per cent of the country''s total population does not have access to
 formal banking services. Your Bank''s financial inclusion initiatives
 are integrated across its various businesses and product groups.
 Your Bank is committed to furthering financial inclusion under the
 Pradhan Mantri Jan Dhan Yojana (PMJDY) and social security schemes. In
 line with the Government''s philosophy of Digital India it has
 implemented customer friendly technology solutions to make basic
 banking available to the common man through Aadhaar and Rupay Card
 enabled micro-ATMs (compliant to Unique Identification Authority of
 India) at every Bank Mitra or Business Correspondent location.
 Complementing the Government''s efforts, your Bank has aggressively
 advocated and pursued the J-A-M (Jandhan, Aadhaar, Mobile) trinity to
 ensure a holistic coverage of customers and easy access through digital
 channels as well as Aadhaar seeding to ensure Government benefits reach
 the end-customer. The Bank has opened 15.8 lakh PMJDY accounts since
 the launch of the scheme.
 Prior to the launch of PMJDY, the Bank had been mobilising Basic
 Banking Savings Deposit Accounts (BBSDA) with the specific objective of
 providing customers a platform to inculcate savings habit. The Bank
 periodically tracks the behaviour in these accounts to ensure that the
 accounts opened are active.  The total number of BBSDA was 73.8 lakh
 (including those opened under PMJDY umbrella) as on March 31, 2016 as
 against 49.35 lakh as on March 31, 2015.
 The Government launched social security schemes in May 2015 with an
 objective of providing risk cover at minimal cost.  The Bank offers all
 three schemes i.e. Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY),
 Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Atal Pension Yojana
 (APY) through its branches, business correspondents and digital
 The Bank is among the leading Private Sector Banks in PMJJBY and PMSBY
 and is a leader in APY, enrolling a total of 24.5 lakh customers in
 these three social security schemes.
 As on March 31, 2016, your Bank has brought over one crore households
 into the banking fold, which were hitherto excluded from basic banking
 services. Of these, over 55 lakh households are in over 5,000 villages
 with a population less than 2,000.  These have been largely excluded
 from the formal banking sector.
 Your Bank firmly believes that financial literacy is the first step
 towards financial inclusion. In order to educate people who do not have
 access to formal banking channels and bring them within this fold,
 various training programmes for customers and even intermediaries like
 Business Correspondents have been put in place.
 Dhanchayat and Other Financial Literacy Initiatives
 In the period under review, your Bank rolled out its programme
 Dhanchayat: Financial Literacy on Wheels. Dhanchayat is an
 educational film to raise awareness on the perils of unorganised
 finance and how the malpractices associated with it hurt the dignity of
 the individual. Launched under the aegis of Swachch Banking - the
 Bank''s CSR initiative for rural India, HDFC Bank- branded Dhanchayat
 video vans travelled to villages to educate the rural populace. The
 initiative covered nearly 4,900 villages thus benefiting nearly 10 lakh
 Your Bank regularly undertakes training programmes on credit
 counselling and inculcating the savings habit. Besides, it also
 provides information on asset creation, insurance, and income
 generation programmes. During the year almost over 1.4 lakh financial
 awareness programmes covering over 22 lakh households were conducted.
 As on the year ended March 31, 2016, your Bank had 1,025 branches in
 rural areas and 1,439 branches in semi urban areas.
 Agriculture and Allied Activities
 A large portion of India''s un-banked population relies on agriculture
 as its main source of livelihood. It is imperative that banks replace
 the traditional unorganized money lending channels by providing
 transparent credit to farmers through various methods, while
 simultaneously enabling income generating activities.  Your Bank
 provides various loans to farmers through its suite of specifically
 designed products such as the Kisan Gold Card, Tractor and Cattle
 Loans. In addition, the Bank offers post-harvest cash credit, warehouse
 receipt financing and bill discounting facilities to Mandi (markets for
 grain and other agricultural produce) participants and farmers. These
 facilities enable the Mandi participants to make timely payments to
 farmers. The Bank carries out this business through branches that are
 located in close proximity to Mandis. For the year ended March 31,
 2016, the Bank''s credit to agriculture and allied activities was about
 Rs, 65,250 crore as against approximately Rs, 49,085 crore in the
 previous year.
 The Bank targets specific sectors to capture supply chain of certain
 crops from the production to the sales stages. On the basis of these
 cash flows, your Bank is able to finance specific needs of the farmers.
 This model has currently been implemented with sugar, fruit, vegetable,
 and tea crops, as well as dairy farmers.  The initiative currently
 underway with dairy farmers includes the appointment of dairy societies
 as business correspondents, through whom the Bank opens accounts of
 individual farmers attached to these societies. The societies route
 payments through these accounts.
 A number of retail credit products such as two-wheeler loans, car
 loans, mortgages that are consumption products in urban centres are
 also means of income generation for rural consumers.  Apart from loans
 directly linked to agriculture, your Bank is one of the few to offer
 many other credit products under one roof to aid financial betterment
 in rural locations. Your Bank has extended provision of its retail
 loans to large segments of the rural population, where the end use of
 the products acquired (by availing Bank loans) is used for income
 generating activities.  For example, loans for tractors, commercial
 vehicles, two wheelers supplement the farmer''s income by improving
 productivity and reducing expenses.
 The use of appropriate technology is necessary to bring about
 efficiency in the agri-value chain, reducing the time taken between
 delivery of produce by the farmer to his final payment. One such
 innovative technology initiative is the Milk-to-Money for dairy supply
 chain. Under the initiative, your Bank has deployed Multifunction
 Terminals (MFTs), also known as Milk-to-Money ATMs, in dairy societies
 at the villages.  The MFTs link to the milk procurement system of the
 dairy society to facilitate payment of milk proceeds into farmers''
 accounts on payment day. The entire process is done by the society
 without any intervention by the Bank at the front-end. MFTs have cash
 dispensers that function as standard ATMs enabling the farmer to
 withdraw the amount from his account immediately.  The transparency in
 the milk collection process benefits both farmers and the society as
 they get payments quickly without the hassle of cash distribution.
 Based on the payment data, the Bank is able to lend to the farmers
 which improves the collection of the society and ultimately milk
 The Bank''s MFT footprint now encompasses Gujarat, Maharashtra, Punjab
 and Rajasthan with over 800 Milk-to-Money ATMs and Micro ATMs,
 servicing about 2.5 lakh farmers. These centres also enable rural
 customers to receive the direct benefit transfers from the Government
 in the same account. Apart from dairy and cattle loans, customers gain
 access to all bank products such as Vehicle Loans, 10 Second Personal
 Loans and Kisan Credit Card.  The farmers also avail other digital
 facilities such as Bill Pay, Missed Call Banking and Mobile Recharge.
 They are also enabled to transact digitally with local merchants using
 products like PayZapp.  This also provides a transacting point for
 other customers in the village, thus creating a complete rural
 Loans against Gold Jewellery
 Loans against gold jewellery have traditionally been an important
 source of credit, dominated by the unorganized sector and pawn brokers.
 Banks and other organized institutions have expanded their product
 suite and reach to offer gold loans.
 The entry of such players has resulted in increased awareness, and at
 the same time provided greater transparency, substituting the money
 lenders. The availability of the asset and the ease of securing a loan
 has made this a convenient and viable credit option. For the year ended
 March 31, 2016, loans against gold jewellery stood at over Rs, 4,500
 crore as against above Rs, 4,000 crore as on March 31, 2015.
 Small and Micro Enterprises
 The Micro, Small and Medium Enterprises (MSME) segment is a vital
 component of the Indian economy. It contributes 45 per cent to the
 country''s total manufacturing output and 30 per cent to exports. Your
 Bank has been a very active participant in this segment and in order to
 engage better with businesses of different sizes, the Bank has created
 specialized verticals. It offers complete banking solutions to micro,
 small and medium scale enterprises across industry segments including
 manufacturing, retailing, wholesale, trading and services. The entire
 suite of financial products including Cash Credit, Overdrafts, Term
 Loans, Bill Discounting, Export Packing Credit, Letter of Credit, Bank
 Guarantees, Cash Management Services and other structured products are
 available to these customers.
 To drive the growth in MSME segment, your Bank organized outreach
 programmes for SME customers. The programmes were also used to create
 awareness among customers about the new digital offerings of the Bank
 to improve efficiencies.  In the year 2015-16, your Bank conducted 27
 loan meets across 17 cities including Guntur, Guwahati, Kanpur, Kutch,
 Lucknow, Nagpur, Vijayawada, and Visakhapatnam.
 The Bank''s advances to Micro, Small and Medium Enterprises has grown by
 35.8 per cent in the year ended March 31, 2016 to touch more than Rs,
 74,500 crore from close to Rs, 55,000 crore for the year ended March
 31, 2015. The Bank exceeded the overall priority sector lending
 requirement of net Bank credit.
 Sustainable Livelihood Initiative (SLI)
 SLI is a board mandated programme to financially include and uplift one
 crore households at the Bottom of the Pyramid through a holistic
 approach to empowering people and making a difference to their lives.
 It entails occupational training, financial literacy, credit
 counselling, livelihood finance, and market linkages.
 Over the last six years, your Bank has accelerated its direct linkage
 programme to people at the Bottom of the Pyramid through Self-Help
 Groups and Joint Liability Groups. The Bank engages with women in
 villages to conduct financial literacy and credit counselling
 programmes, form groups, and then funds these groups for income
 generating activities. This enables the delivery of viable credit to
 the rural poor in a sustainable manner and at the same time inculcates
 saving and banking habits.  As on March 31, 2016, your Bank has covered
 approximately over 55 lakh households in villages spread over 360
 districts in more than 25 states including Assam, Bihar, Chhattisgarh,
 Meghalaya, Madhya Pradesh, Odisha, Rajasthan, Sikkim, Tripura, Uttar
 Pradesh and Uttarakhand.
 In keeping with your Bank''s commitment to this initiative, SLI has
 about 6,900 dedicated employees, who are trained to identify and cater
 to diverse customer needs. They recognize that villages are not
 homogeneous, but have their unique socio-economic and cultural
 characteristics. This leads to formulation of village specific
 strategies for customer acquisition and retention. Given the profile of
 the clientele, the transactions are often low in value but high in
 In keeping with the Bank''s GoDigital focus, it has leveraged
 technology to reduce transaction costs and enhanced ease of doing
 business. The GoDigital drive has resulted in reduced response time
 in processing customer requests. Lengthy forms have been shortened for
 greater convenience to customers.  These initiatives have reduced
 turnaround time for customers by as much as 30 per cent. e-KYC and
 Credit bureau check without PAN have addressed the issue of data
 validation to a great extent. Transaction based on mobile Apps /
 platforms to move villages towards cashless economies are in the
 The success of the SLI programme has been validated by various awards
 and recognitions. One such accolade has come from National Bank for
 Agriculture and Rural Development.  In its annual publication, ''The
 Status of Microfinance in India 2014-15'' the status of micro finance
 initiatives in the country is illustrated and gives a glimpse of
 interventions by various banks across geographies. The publication
 serves as a reference point for people in policy making functions,
 researchers and others involved in developmental finance.
 A special mention commending the SLI programme of the bank has been
 made in the publication. It recognizes that the SLI model of HDFC Bank
 may be studied for adoption by other Banks.  It is interesting to note
 that SLI is a relatively new model that has been in operation since
 Innovation is now embedded in the DNA of HDFC Bank.  Employees are
 encouraged across functions to continuously come up with new ideas and
 act as digital evangelists.
 Innovation in the Bank has been driven by digitization, the building
 block for which was laid two decades ago by investing in technology.
 Digitization has been a theme for the Bank in the last two years and it
 gained substantial momentum in the year under review. The Bank is happy
 to share that it has a Digital Innovation team, perhaps the only such
 group in the Indian banking context, to scout for and experiment with
 technology both contemporary and even futuristic.
 Your Bank hosted a Digital Innovation Summit in March 2016 to tap into
 emerging technological trends that are shaping the financial technology
 space. We are happy to report that five companies have been chosen as
 potential partners in its journey.  These companies have been drawn
 from the domains of Artificial Intelligence, Marketing, Mobile
 Payments, Quality Assurance and Biometric Payments.
 Some of the major digital innovations introduced this year are:
 Innovations in Retail Business
 - PayZapp with SmartBuy: A comprehensive, convenient and secure payment
 solution which allows customers to link their cards once and then pay
 through one click. Smart Buy within PayZapp brings the best deals and
 discounts offered by merchant partners exclusively for HDFC Bank
 customers.  PayZapp offers the unique combination of the convenience of
 1-click payments and security. PayZapp for business allows merchants to
 bill their customers and receive payments instantly over the mobile,
 thereby making it easier for them to collect cash remotely and expand
 their business.  - 10 second Personal Loan: A pre-approved instant loan
 on NetBanking which is offered to select customers and is disbursed
 within 10 seconds of applying.
 - ZipDrive: An instant auto loan approval, which allows customers to
 generate an online approval with reference number, walk into a
 dealership and drive out with the car of their choice. This approval,
 valid for 30 days, enables the dealer to request HDFC Bank for the
 already pre-approved loan sanctioned to the customer.
 - Virtual Relationship Manager: Offered to High Net Worth customers by
 invitation, this is a 24*7 access to a relationship manager through a
 safe and secure video interface on the mobile banking app.
 - Chillr: Your Bank''s partner app, which allows customers to send and
 receive money using phone book contacts.  The app also allows customers
 to recharge mobiles, DTH, data cards and make merchant payments.
 - Design Your Own Loan Against Securities (LAS):
 This combines the power of a loan and a bank account.  LAS can be
 availed against securities ranging from equity to mutual funds to Kisan
 Vikas Patra. What''s more, customers can design the loan on the basis of
 these securities.
 - Loans on ATMs: Your Bank offers 10 second personal loans on ATMs.
 Various consumer loans and top-up of existing loans to customers
 through ATMs will also be made available in the future.
 - Missed Called Recharge: A simple and innovative way of recharging
 pre-paid mobile phones. It requires one-time activation of the service.
 The mobile number gets recharged for the selected amount, every time
 the customer gives a missed call to a particular number.
 - MobileBanking Liteapp: A mobile banking app, offering several basic
 transactions in Hindi and English targeted at semi-urban as well as
 rural customers. This app caters to the off-line internet customers.
 Innovations in Wholesale Business
 - Trade on Net and E Net on Mobile for corporate customers: For cash
 management, trade finance, treasury and supply chain services, dynamic
 digital platforms like ''Enet'' and Trade on Net'' offer value additions
 at every stage of the financial value chain. With Trade Finance Mobile,
 the services are now accessible anytime, anywhere, allowing customers
 to authorize transactions on-the-go with OTP- based security.
 People are a core value of the Bank and they constitute Human Capital.
 Your Bank firmly believes that a well-trained and motivated workforce
 is critical to achieving its strategic goals. The Bank''s HR strategy is
 closely allied to its business strategy as enunciated in the section on
 ''Mission, Business Strategy and Approach to Business''.
 The five broad pillars of HDFC Bank''s People strategy are:
 - Resourcing and Staffing: In an industry where agility in talent
 acquisition and deployment is key to geographic expansion and growth,
 your Bank has leveraged online recruitment along with other channels
 like job ready model to develop reach and quality of hires. It has
 created a strong leadership pipeline across levels by identifying the
 right talent internally and grooming them for challenging roles.  This
 has resulted in an 85,000 plus strong work force that is well
 motivated, and trained to deliver value to the customer.
 - Career Management: Your Bank''s talent management processes create
 opportunities for employees to develop and grow. The systematic
 investment of time in career discussion with employees, competency
 assessment, and intensive functional and behavioural training through
 the Gurukul programmes sends a strong message of the Bank''s commitment
 to employees on career progression.
 - Employee Engagement: The Bank has nurtured an enabling performance
 culture in line with its vision to be a World Class Indian Bank. The
 performance management system aligns organization goals with key
 objectives for each business which drives individuals to strive for
 excellence.  In addition, your Bank strives to strengthen its connect
 with employees and has created employee engagement events, conducted
 both at local and national levels.
 o Josh Unlimited: Pan-India Sports event conducted in 26 cities
 o Stepathlon: Almost 2500 employees participated in the employee
 wellness initiative
 o Hunar: In-house Talent competition conducted in 9 cities
 o Corporate Online Library: Inculcates reading habit.  Almost 1.5 lakh
 books made available
 o Kwiz Kat: National Banking Quiz with participation by 200 teams
 In addition to the aforementioned programmes, employees can participate
 in the HDFC Bank Voice Hunt Contest in association with Shankar
 Mahadevan Academy and STILLS which is an inter-corporate photography
 The Bank encourages employees to participate in community and social
 work. Through your Bank''s Employee Payroll Giving programme,
 employees can choose to donate a certain amount from their salary each
 month for specific causes.
 The other flagship programmes are the Blood Donation Drive and the
 Bank''s volunteering programme which involves employees imparting
 financial literacy as well as relief efforts like the J&K flood relief.
 HDFC Bank Cares is an initiative to address healthcare needs of
 employees. Activities under this programme include Health mailers,
 Doctor on Call, Health check-up camps and Health Talks by experts. The
 Bank runs an on-site crche at Kanjurmarg, Mumbai.
 These initiatives help create a connect among employees and also helps
 them forge an emotional bond with the organization. Further, a strong
 feedback mechanism helps shape the programmes and aligns them with
 people''s expectations and organization policies.
 - Training and Development: Training plans are developed based on
 analysis of training needs done in consultation with various
 businesses. An extensive bouquet of training programmes are delivered
 covering on-boarding, product and process training, advanced programmes
 and behavioural training. The on-boarding training ensures that new
 employees are trained comprehensively and equipped with necessary
 know-how, as well as functional and behavioural skills required for the
 role. The product training and advanced programmes enable skill
 development, regular updates and build expertise in staff.  The
 training methodology has evolved to application based training to
 include simulations, case studies and games.  Today, over 100 courses
 can be availed on e-learning platforms.
 - Rewards: Merit is the driving force in the organization.  The
 distinctive part of the milieu of rewards both financial and
 non-financial is the objectivity and transparency with which it is
 done. This fair and equitable approach encourages staff to give off
 their best. The compensation policy ensures that remuneration is not
 only competitive but also includes wealth creation opportunities
 through long term rewards like ESOPs. The Bank has a comprehensive
 compensation policy that has been articulated in line with the Reserve
 Bank of India''s guidelines. The Star Awards is an institutionalized
 recognition programme that periodically recognizes performers. The
 Tejaswini Awards is a special category to recognize women achievers.
 Other Statutory Disclosures
 Board and Board Committees
 The details of Board meetings held during the year, attendance of
 Directors at the meetings and constitution of various Committees of the
 Board are included separately in the Corporate Governance Report.
 Extract of Annual Return
 Pursuant to section 92 (3) of the Companies Act, 2013 and Rule 12 (1)
 of the Companies (Management and Administration) Rules, 2014, the
 extract of the Annual Return is annexed as ANNEXURE 3.
 Directors'' Responsibility Statement
 Pursuant to Section 134 (3)(c) read with Section 134 (5) of the
 Companies Act, 2013, the Board of Directors hereby state that:
 - In the preparation of the annual accounts, the applicable accounting
 standards have been followed along with proper explanation relating to
 material departures, if any
 - We have selected such accounting policies and applied them
 consistently and made judgements and estimates that are reasonable and
 prudent so as to give a true and fair view of the state of affairs of
 the Bank as on March 31, 2016 and of the profit of the Bank for the
 year ended on that date
 - We have taken proper and sufficient care for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 2013 for safeguarding the assets of the Bank and for
 preventing and detecting fraud and other irregularities
 - We have prepared the annual accounts on a going concern basis
 - We have laid down internal financial controls to be followed by the
 Bank and that such internal financial controls are adequate and were
 operating effectively
 - We have devised proper systems to ensure compliance with the
 provisions of all applicable laws and that such systems were adequate
 and were operating effectively
 The Auditors, M/s. Deloitte Haskins & Sells, Chartered Accountants,
 will retire at the conclusion of the forthcoming Annual General Meeting
 and are eligible for re-appointment. Members are requested to consider
 their re-appointment for financial year 2016-17 on an annual
 remuneration of Rs, 1,90,00,000 (previous year Rs, 1,10,00,000 and
 additional fees, proposed for ratification by the members, of Rs,
 40,00,000 for reporting on internal financial controls for financial
 year 2015-16) plus service taxes as applicable, which has been approved
 by the Audit Committee of the Board.
 Disclosure under Foreign Exchange Management Act, 1999
 The Bank is in compliance with the Foreign Exchange Management Act,
 1999 (FEMA) provisions with respect to downstream investments made in
 its subsidiaries. Further the Bank has obtianed a certificate from its
 statutory auditors certifying that
 the Bank is in compliance with the FEMA provisions with respect to the
 downstream investments made in its subsidiaries during the year.
 Related Party Transactions
 The details of transactions entered into with related parties are
 enclosed as ANNEXURE 4 to this report.
 Particulars of Loans, Guarantees or Investments
 Pursuant to Section 186 (11) of the Companies Act, 2013, the provisions
 of Section 186 of Companies Act, 2013, except sub-section (1), do not
 apply to a loan made, guarantee given or security provided by a banking
 company in the ordinary course of business. Further, in terms of the
 Companies (Removal of Difficulties) Order, 2015, nothing in Section 186
 except sub section (1) shall apply to any acquisition made by a banking
 company in the ordinary course of business. The particulars of
 investments made by the Bank are disclosed in Schedule 8 of the
 Financial Statements as per the applicable provisions of Banking
 Regulation Act, 1949.
 Financial Statements of Subsidiaries and Associates
 In terms of Section 134 of the Companies Act, 2013 and read with Rule
 8(1) of the Companies (Accounts) Rules, 2014 the performance and
 financial position of the Bank''s subsidiaries and associates are
 enclosed as ANNEXURE 5 to this report.  There were no entities which
 became or ceased to be the Bank''s subsidiaries, associates or joint
 ventures during the year.
 Whistle Blower Policy / Vigil Mechanism
 The Bank has adopted a Whistle Blower Policy pursuant to which
 employees of the Bank can raise their concerns relating to fraud,
 malpractice or any other activity or event which is against the
 interest of the Bank or society as a whole. Details of complaints
 received and the action taken are reviewed by the Audit Committee.
 The functioning of the Whistle Blower mechanism is reviewed by the
 Audit Committee from time to time. None of the Bank''s personnel have
 been denied access to the Audit Committee.
 Declaration by Independent Directors
 Mrs. Shyamala Gopinath, Mr. Partho Datta, Mr. Bobby Parikh, Mr. A. N.
 Roy and Mr. Malay Patel are Independent Directors on the Board of the
 Bank as on March 31, 2016. All the Independent Directors have given
 their respective declarations under Section 149 (6) and (7) of the
 Companies Act, 2013 and the Rules made thereunder. In the opinion of
 the Board, the Independent Directors fulfil the conditions relating to
 their status as Independent Directors as specified in Section 149 of
 the Companies Act, 2013 and the Rules made thereunder.
 Board Performance Evaluation
 The Nomination and Remuneration Committee (NRC) has approved a
 framework / policy for evaluation of the Board, Committees of the Board
 and the individual members of the Board. The said framework / policy
 was duly reviewed during the year. A questionnaire for the evaluation
 of the Board and its Committees, designed in accordance with the said
 framework and covering various aspects of the performance of the Board
 and its Committees, including composition and quality, roles and
 responsibilities, processes and functioning, adherence to Code of
 Conduct and Ethics and best practices in Corporate Governance was sent
 out to the directors.  The responses received to the questionnaires on
 evaluation of the Board and its Committees were placed before the
 meeting of the Independent Directors for consideration.  The assessment
 of the Independent Directors on the performance of the Board and its
 Committees was subsequently discussed by the Board at its meeting.
 Your Bank has in place a process wherein declarations are obtained from
 the directors regarding fulfilment of the fit and proper criteria in
 accordance with the guidelines of the Reserve Bank of India. The
 declarations from the Directors other than members of the NRC are
 placed before the NRC and the declarations of the members of the NRC
 are placed before the Board. Assessment on whether the Directors fulfil
 the said criteria is made by the NRC and the Board on an annual basis.
 In addition, the framework / policy approved by the NRC provides for a
 performance evaluation of the Non-Independent Directors by the
 Independent Directors on key personal and professional attributes and a
 similar performance evaluation of the Independent Directors by the
 Board, excluding the Director being evaluated. Such performance
 evaluation has been duly completed as above.
 Policy on Appointment and Remuneration of Directors and Key Managerial
 The Nomination and Remuneration Committee (NRC) recommends the
 appointment of Directors to the Board.  The NRC identifies persons who
 are qualified to become Directors on the Board and evaluates criteria
 such as academic qualifications, previous experience, track record and
 integrity of the persons identified before recommending their
 appointment to the Board.
 The remuneration of whole time Directors is governed by the
 compensation policy of the Bank. The compensation policy of the Bank,
 duly reviewed and recommended by the NRC has been articulated in line
 with the Reserve Bank of India guidelines.
 Your Bank''s compensation policy is aimed to attract, retain, reward and
 motivate talented individuals critical for achieving strategic goals
 and long term success. Compensation policy is aligned to business
 strategy, market dynamics, internal characteristics and complexities
 within the Bank. The ultimate objective is to provide a fair and
 transparent structure that helps the Bank to retain and acquire the
 talent pool critical to building competitive advantage and brand
 Your Bank''s approach is to have a pay for performance culture based on
 the belief that the performance management system provides a sound
 basis for assessing performance holistically.  The compensation system
 should also take into account factors like roles, skills /
 competencies, experience and grade / seniority to differentiate pay
 appropriately on the basis of contribution, skill and availability of
 talent on account of competitive market forces. The details of the
 compensation policy are also included in Schedule 18 - Notes forming
 part of the Accounts - Note no. 24.
 Non-Executive Directors are paid remuneration by way of sitting fees
 for attending meetings of the Board and its Committees, which are
 determined by the Board based on applicable regulatory prescriptions.
 Non-Executive Directors are also reimbursed expenses incurred by them
 for attending meetings of the Board and its Committees at actuals. The
 remuneration payable to the Non-Executive Directors and Independent
 Directors is governed by the provisions of the Banking Regulation Act,
 1949, RBI guidelines issued from time to time and the provisions of the
 Companies Act, 2013 and related rules to the extent it is not
 inconsistent with the provisions of the Banking Regulation Act, 1949
 and RBI guidelines. The Companies Act, 2013, the SEBI (Listing
 Obligations and Disclosure Requirements) Regulations, 2015, and dynamic
 business environment have placed more onerous responsibilities on the
 Non-Executive Directors, particularly the Independent Directors. These
 require the Directors to play a more pro-active role, along with
 greater involvement in Board''s decision making process. In order to
 enable the Bank to attract and retain professional directors, it is
 essential that such Directors are appropriately compensated. In terms
 of the guidelines issued by RBI for compensation of Non-Executive
 Directors of private sector banks dated June 1, 2015, the Board has,
 subject to the approval of the members at the ensuing Annual General
 Meeting of the Bank, approved payment of profit-related commission to
 its non-executive directors, other than the Chairperson, not exceeding
 Rs, 10,00,000/- (Rupees Ten Lakh only) per annum for each Non-Executive
 None of the Directors of your Bank other than Mr. Kaizad Bharucha is a
 director of the Bank''s subsidiaries as on March 31, 2016. Mr. Bharucha
 is paid sitting fees by the subsidiary for attending meetings of the
 Board and Committees of the subsidiary. During the year, Mr. Bharucha
 was paid sitting fees of Rs, 4,50,000 by the subsidiary. Mr. Bharucha has
 not received any commission from the subsidiary.
 The Board of Directors of HDB Financial Services Limited, the Bank''s
 subsidiary, has appointed Mr. Aditya Puri as the Non-Executive Chairman
 on the Board of their company with effect from May 1, 2016.
 Significant and Material Orders Passed By Regulators
 During the year under review no significant or material Orders were
 passed by any regulators or courts or tribunals against the Bank other
 than those disclosed separately in the financial statements and in the
 Corporate Governance Report.
 Directors and Key Managerial Personnel
 Mrs. Renu Karnad and Mr. Keki Mistry will retire by rotation at the
 ensuing Annual General Meeting of the Bank and are eligible for
 re-appointment. During the year, Dr. Pandit Palande ceased to be a
 Director on the Bank from the close of business hours on April 23,
 2015, on completing the maximum permitted tenure of eight years as per
 Banking Regulation Act, 1949. Your Directors wish to place on record
 their sincere appreciation of the contribution made by Dr. Palande
 during his tenure with the Bank.
 Mr. Umesh Chandra Sarangi was appointed as Additional Director with
 effect from March 1, 2016 to hold office till the conclusion of the
 ensuing Annual General Meeting. Mr. Sarangi has been appointed as a
 director having specialized knowledge and practical experience in
 agriculture and rural economy as per the provisions of Section 10-A
 (2)(a) of the Banking Regulation Act, 1949. In terms of Section 149 of
 the Companies Act, 2013, it is proposed to appoint Mr. Sarangi as an
 Independent Director for a tenure of five (5) years, determined in
 accordance with the applicable provisions of the Banking Regulation
 Act, 1949 and the guidelines of RBI in this regard. The Bank has
 received a notice from a member proposing the candidature of Mr.
 Sarangi as Director of the Bank at the ensuing Annual General Meeting.
 The brief resume / details regarding the Directors proposed to be
 appointed / re-appointed as above are furnished in the report on
 Corporate Governance. There have been no changes in the Directors and
 Key Managerial Personnel of the Bank other than the above.
 Familiarization Programme for Independent Directors
 The various programmes undertaken for familiarizing Independent
 Directors with the functions and procedures of the Bank are disclosed
 in the Corporate Governance Report.
 Particulars of Employees
 The information in terms of Rule 5 of the Companies (Appointment and
 Remuneration of Managerial Personnel) Rules, 2014 is given in the
 ANNEXURE 6 to this report.
 The Bank had 87,555 employees as on March 31, 2016.
 There were 311 employees employed throughout the year who were in
 receipt of remuneration of more than Rs, 60 lakh per annum and 23
 employees employed for part of the year who were in receipt of
 remuneration of more than Rs, 5 lakh per month.  The details of such
 employees in terms of Rule 5 of the Companies (Appointment and
 Remuneration of Managerial Personnel) Rules, 2014 are appended
 separately and form part of this report.  The Report and Accounts are
 being sent to the shareholders excluding these particulars and any
 shareholder interested in obtaining the said details may write to the
 Company Secretary at the Registered Office of the Bank.
 Conservation Of Energy, Technology Absorption, Foreign Exchange
 Earnings and Outgo
 (A) Conservation of Energy
 Your Bank has undertaken several initiatives in this area such as:
 - Replacing obsolete server infrastructure with servers with
 virtualization thus saving on Data Centre power and cooling
 - Installing energy capacitors at its high consumption offices to
 reduce energy consumption
 - Installing energy saving electrical devices for saving energy and
 supporting go-green initiative. (Device in ACs)
 - Advocated switching off lights and ACs when not required, turning off
 PCs when not in use (post 10 PM through remote control) setting higher
 temperatures on ACs to reduce consumption
 - All main Sign Boards in Branches switched off during the night post
 10 pm
 - Put controls on usage of Lifts, ACs, Common Passage lights and other
 electrical equipment
 (B) Technology Absorption
 Your Bank has been at the forefront of technology absorption.
 Technology has continued to provide business and customers with
 state-of-the-art products and services. Through adoption of carefully
 evaluated technology solutions, the Bank has been able to offer an
 enhanced customer experience at optimal costs.  This is made possible
 by using advanced analytics to create a 360 degree view of all 3.7
 crore customers. The analytics engine uses machine learning to analyse
 structured and unstructured data - transactional, behavioural,
 demographics, system logs, click streams, bureau data and more - for
 insights. This helps in offering relevant recommendations using a mix
 of advanced algorithms, behavioural micro-segments, real time action
 and event triggers built on the backbone of cutting edge big data
 technologies.  These recommendations are served via personalised
 campaigns, delivered through an Omni channel approach.
 The Bank''s Technology Absorption is illustrated further by:
 - Successfully migrating to MPLS technology
 - Making Internet facing infrastructure and applications IPV6 compliant
 - Implementing cutting edge P2P payment solution in partnership with
 relevant industry players
 - Implementing straight through processing, using SOA (services
 oriented architecture) enabled bio-metric authorization for 30 minutes
 Vehicle Loan Approval
 - Implementing a Risk Intelligence Management System for Retail Assets
 to enable monitoring from loan pre-disbursement to repayment / closure
 - Embarking on a programme of Implementation of RBI guidelines on
 Information Security, Electronic Banking, Technology Risk Management
 and Cyber Frauds
 - Strengthening technology infrastructure to ensure uninterrupted
 service to customers
 The expenditure incurred on Research and Development
 Being in the Financial Services Space, your Bank evaluates innovative
 technology solutions that are readily available or near-ready for
 deployment and broadly fit its business requirements. Solutions that
 are commercially viable are then tested in collaboration with the
 relevant technology partners. Once proven, the technology solutions are
 then procured and commissioned for active business use.
 (C) Foreign Exchange Earnings and Outgo
 During the year the total foreign exchange earned by the Bank was Rs,
 1,227.7 crore (on account of net gains arising on all exchange /
 derivative transactions) and the total foreign exchange outgo was about
 Rs, 151.12 crore towards the operating and capital expenditure
 Secretarial Audit
 In terms of Section 204 of the Companies Act, 2013 and the Rules made
 there under, M/s. BNP & Associates, Practising Company Secretaries have
 been appointed as Secretarial Auditors of the Bank for the financial
 year 2015-16. The report of the Secretarial Auditors is enclosed as
 ANNEXURE 7 to this Report.  The observations in the said report are
 self-explanatory and no further comments / explanations are called for.
 Corporate Governance
 In compliance with Regulation 34 and other applicable provisions of the
 Securities and Exchange Board of India (Listing Obligations and
 Disclosure Requirements) Regulations, 2015, a separate report on
 Corporate Governance along with a certificate of compliance from the
 Secretarial Auditors, forms an integral part of this Report.
 Business Responsibility Report
 The Bank''s Business Responsibility Report containing a report on its
 Corporate Social Responsibility Activities and Initiatives in the
 format adopted by companies in India as per the guidelines of the
 Securities and Exchange Board of India in this regard is available on
 its website
 Information under the Sexual Harassment of Women at Workplace
 (Prevention, Prohibition and Redressal) Act, 2013
 The relevant information is included in Section E - Principle 3 of the
 Business Responsibility Report for 2015-16.
 Your Directors would like to place on record their gratitude for all
 the guidance and co-operation received from the Reserve Bank of India
 and other government and regulatory agencies.  Your Directors would
 also like to take this opportunity to express their appreciation for
 the hard work and dedicated efforts put in by the Bank''s employees and
 look forward to their continued contribution in building a World Class
 Indian Bank.
 Your Bank believes that the Indian economy is expected to grow faster
 in 2016-17. The Bank is well positioned to continue to grow faster than
 the banking system both in retail and wholesale segments. A good
 monsoon holds the key to accelerated GDP growth and consequently to
 that of the banking industry.  Over the next couple of years, the Bank
 will leverage on its distribution strength and digital platforms
 especially in the rural and semi-urban parts of the country for a more
 sustained growth.  Your Bank will continue its focus on five core
 values of Customer Focus, Operational Excellence, Product Leadership,
 People and Sustainability. Needless to say, your Bank will continue to
 operate with the strongest possible commitment to Corporate Governance.
 All of this will help the Bank on its onward growth journey and help
 create long term shareholder value.
                                    On behalf of the Board of Directors
                                                 Mrs. Shyamala Gopinath 
 Mumbai, May 19, 2016
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