HDFC Bank, led by Aditya Puri, has become India's most valuable bank with significant growth in revenue and profits, attributed to its disciplined management and innovative digital banking strategies. The bank aims to appeal to younger customers by offering a wide range of digital transactions and pre-approved loans, while also expanding its footprint in rural areas. Despite facing competition from other private banks, HDFC's unique approach to trial and error in product offerings has supported its continued growth in the rapidly evolving banking landscape.

1. Trends in Banking
(Part-III)

2. India’s Apple-The HDFC Bank
(HDFC Bank’s Aditya Puri has
created India’s most valuable Bank)

3. Aditya Puri & his HDFC Bank
HDFC Bank relies on two
simple traits for staying on
top;
1.Common sense
2.Discipline
You determine what you have
to do & you stick to it.
Banking is not very
complicated & you need to
keep it that way says Aditya
Puri
In the year ended, Mar 31
2015 HDFC Bank revenue
tallied $9.8 billion(17% up
from the previous year)
-Net profits rose 21% to $
1.7 billion.
HDFC ‘s achievements;
-$43 Billion market Cap
-32 Million Customers
-4000 branches
-No stress on portfolio
-Healthy margins
-Good distribution network
-Cutting-edge technology
-And enough capital
This record puts the Bank on
Fab 50 list of Asia –Pacific’s
best big publicly traded
companies for the ninth
time-making it the only
company to make the list
from 2005 onwards
-Puri has built HDFC Bank from
the scratch
-He is the longest-serving chief
of a Non-State owned Bank&
also the highest paid@$1.2
million for the latest fiscal
-Puri is paid for his performance
Puri,64 is the only leader that
Mumbai-based HDFC Bank has
ever had. HDFC recruited Puri
who was then the CEO of
Citibank Malaysia after nearly
two decades with Citibank
across India, Greece, Saudi
Arabia & Southeast Asia

4. HDFC-A journey towards a Goal
HDFC’ Strategies over the decades
-HDFC Bank ‘s biggest strength is its consistency of Management-Puri has been its CEO for the past 21 years. Puri
knows the backdrop & his thought process is very clear
-HDFC Bank began its journey offering loans to blue-chip companies
-Soon HDFC attached itself to India’s emerging salaried class
-HDFC signed-up a large no. of accounts that received paychecks through direct deposit
-HDFC then started with the concept of Credit Cards, auto loans & Personal Loans
-The bank raised $1.6 billion in Feb 2015 both to meet regulatory requirements & fuel more growth
-HDFC is planning to open around 300 more branches in 2016
-HDFC Bank is predominantly focusing on Digital Banking hoping to attract young
Indians who want to buy, pay & invest through their cell phones. The bank allows
customers to complete more than 75 types of transaction on a cell phone called “Bank
Aaapke Mutti Mein App”
-HDFC Bank recently began offering pre-approved loans that are disbursed digitally in 10
seconds. The money can be borrowed at any time of day or night provided the customer’s
data are already with the bank.
-HDFC Bank wants to build a full-fledged digital culture within the bank so customers
can use the Internet to take care of their banking needs
HDFC faces tough competition
from private sectors banks such as ;
ICICI Bank
Axis Bank
ICICI with $15 billion in revenue
for the last fiscal year is hailed for
its trail-blazing approach. ICICI was
the first bank to make a huge foray
into a retail banking
-HDFC picked-up on many of
ICICI’s innovations in its initial
years. In 2014 HDFC’s net
profit grew faster than ICICI &
-HDFC also has a lower level
of Non-Performing
Assets(NPA)
Puri opines that a lot of the
future growth is going to come
from India’s semi-urban &
rural areas(where 605 of the
country lives).Nearly 55% of
the bank’s branches are already
in these areas
One of the keys top the bank’s
success has been its method of
testing new products & services
before jumping in headlong.
When one pilot is successful it
conducts more pilots & then
slowly rolls-out the new offering
bankwide. ‘We fail but we fail
small ‘-says Aditya Puri.

5. Aditya Puri’s as a Banker & Personal Life
There are talks of a merger between Housing Development Finance Corporation & HDFC Bank.
HDFC has a revenue of $8 billion in 2014 & holds 22% stake in HDFC Bank .If this happens this
will be one of the largest financial institutions in the country rivaling the state-owned bank
SBI.HDFC is awaiting regulatory support for this merger
Puri manages
the bank by
setting targets
& then
maintaining a
eye on any
slippage
Puri has two
children;
1.Amrita Puri
(Actress)
2.Amit Puri
(Businessman
in Singapore)
When Aditya Puri is convinced of an Idea-it full speed ahead. In November
2014,he went to silicon valley & visited an array of companies from Apple to
Facebook to Google. At the end of the journey he came to an conclusion-”Why do
we need Apple Pay when we can have HDFC Pay-Puri says. When you think
money you must think HDFC-whether you want to get an education loan or home
insurance or pay the pizza guy or buy groceries”. Now the Bank has its own digital
payment applications
Puri’s formulae for keeping it simple applies to his personal life as well. Puri:
Leaves the Office-5.30 PM
Home-Mumbai’s prabhadevi neighborhood & goes to home for lunch every day
Puri doesn’t carry a cell phone or a wallet & do not even wear a watch
Why do I need these things. he asks?
Puri doesn’t type his own e-mails. He dictates to his secretary & she sends out the
mails.
When Puri leaves the office there isn’t a single piece of paper pending or an
unanswered e-mail
Puri @ home enjoys gardening, gourmet cooking, his three dogs & Ghazals, an
ancient poetic form that consists of rhyming couplets & a refrain

6. Aditya Puri & HDFC Bank
•Puri sees more growth ahead under Modi
led government. India in the medium-to-long
term is an excellent gowth story. Whether it
grows at 7,8 or 9% the platform is in place &
the new government is working on various
initiatives .
•In Fiscal 2015 credit growth was only 9%
down from 14% in 2014
•Modi government has not announced any
big-bang banking reforms but it has
promised State-Run Banks that it will give
them more capital only after certain goals are
met such as keeping bad loans under control
or meeting targets on return on assets
Aditya Puri’s term as MD
of HDFC Bank will end in
October 2015 but a recent
Central Bank guideline
raised the retirement age
for private sector banking
chiefs from 65 to 70 &
Puri is awaiting for his
extension by the
shareholders.
I am as excited today
about digital banking &
selling to rural areas as I
was about building the
bank in the initial days
-Aditya Puri

7. Protect your Bank from
various Frauds
Digital Financial Transactions while convenient also pose a
threat to your money. Here’s what not to do?

8. When you carry cash, you run the risk
of loosing the money or getting robbed.
Similarly there are risks involved in
digital & online banking as well.
According to a June report by
PricewaterhouseCoopers Pvt
Ltd(PwC)-As financial institutions use
more digital banking channels, the new
technologies make them more
susceptible to fraud
The above statement doesn’t mean
that one should avoid digital
transactions completely. In fact it’s a
convenient & cost-effective method.
All one has to do is be aware of the
risks & not disclose any
confidential information
such as passwords or PIN
Go Digital
Every
Bank’s new
Formulae to
customers

9. Traditionally-Cheques
topped the list of
frauds in Banking. But
Off late, with the
increase use of Internet
& Mobile phone for
financial transactions
new kinds of frauds
have emerged
Some of the
commonly perpetrated
frauds prevalent across
the banking value
chain includes
Phishing ,Vishing,
Smishing
Phishing means
collecting in formation
from a customer by
sending fake e-mails.
Vishing means calling a
customer posing as a
bank executive or an
official from the Central
Bank & collecting
information for identity
theft
The data can also be
stolen through smishing
in which the customer
receives an SMS with a
web link which if clicked
downloads a malicious
programme causing theft
of data
Banking Transaction
can be categorized
into three channels;
1.Mobile Banking
2.Net Banking
3.ATM Cards
One is susceptible to
frauds on any of the
above channels

10. Hackers create fake apps which will look exactly like the original. The user
Interface is also very similar to the original application.
How do they get you to download the app?
One way is to send the bank customer a link asking them to upgrade the Bank’s
app. If you click on the link a fake app gets downloaded. When you enter your
User ID/Password, the information is stolen
How does SIM Swap happens;
1.Fraudsters will first collect your personal banking information through
phishing, vishing, smishing or any other means
2.Once they have your personal information, they get your SIM Blocked &
obtain a duplicate one by visiting the mobile operators retail outlet with fake
identity proof. The mobile operator deactivates the genuine SIM Card which
was blocked & issues a new SIM to the fraudsters
3.It is now simple to generate a One-Time-Password(OTP) required for txns
using the stolen banking information .This OTP is received on the new SIM
held by the fraudster & they can now transact
This type fraud can be perpetrated by a bank employee.
Ex: You have an account with a bank but you don’t use the mobile app. An
employee of the bank can attach a different mobile number to your bank
account & install a mobile application on that mobile device. Once the app
gets linked to your account with the incorrect number-the concerned
employee can do txns. Usually bank alerts the account holder about a txn
via SMS. Since the number ,inked to the account is different, you will not
get any notification on your mobile
Mobile
Banking
Frauds
According to the RBI,in 2014-15 22 million of the 589 million bank account holders were using Mobile
Banking apps. The volume of mobile banking txns has also risen from around Rs.1,819 crores (2011-12) to
about Rs.1.02 trillion(2014-15)-according to PwC report
Fake
Apps
SIM
Swap
APP
mapped
to
incorrect
number

11. The Point-of-Sale(POS) terminals where
you swipe your cards for a transaction &
the ATM use the same channels for the
Bank called base 24 switch through
which your card txn go through. Here
fraud may happen if your card gets
cloned or skimmed through the POS or
ATM
Cloning
Cloning can happen online as well as offline. For Ex:
Say you swiped your card at a restaurant where the
POS is misused to clone cards or you enter your card
details at a fake shopping site. Once you enter the
details the fraudsters clone the cards with your details
& then use the information to make online purchase.
When you use Debit & Credit Cards, theft of identity
by use of card readers in restaurants & shops is often
done with the help of restaurant waiters & shop sales-
persons.
Skimming
This involves a machine or camera that is
installed at an ATM to pick up card
information & PIN Numbers when
customers use their cards. A fraudster
acquires this data & withdraws money from
the machine
ATM
Card
Frauds

12. Net Banking
Frauds
• Net Banking is now
acknowledged as a
traditional channel for
transaction & has been
attached too. The two
primary sources of Net
Banking fraud are
executed through
Malware
Net Banking
Frauds
• It would either be
through stealing
passwords from
customers or stealing
customer details from
bank systems. The
intent is to access the
password for the
account to enable
siphoning of funds
Net Banking
Frauds
• Hackers can also obtain access
to a persons mobile phone
through malware or
cloned/fraudulently obtained
SIM Card & then use the
information to gain access to the
Net Banking Channel
• A secondary & more indirect
approach is to hijack a person’s
Net Banking session through
his/her computer using a
malware so that it appears as a
legitimate transaction from the
account holders computer

13. Whose liability is it?
If you have been a victim of any of these
frauds what should you do?
According to a Master Circular by RBI on
“Frauds-classification & reporting”, the
central bank has put the responsibility to
provide protection against & fight frauds on
banks exposing them to a completely new
horizon of financial risks. Further banks are
now required to report to the RBI complete
information on frauds & the follow-up action
While banks are mandated to prevent
frauds ,as a customer we can too take
some steps to protect ourselves. Ethical
hackers(people who hack to evaluate the
level of security & without any malicious
intent)say that users should be very
careful when using banking or other apps
on which financial txns can be conducted
1.Don’t jailbreak your phone,(Jail breaking is the process of removing hardware restrictions & thus allowing free apps)
2.’Check what you download & run on your phone’. Don’t use WhatsApp for confidential information instead use
encrypted app
3.Limit your Debit Card usage at PoS Terminals & use it only as an ATM Card for cash withdrawl. Try to use Credit
Cards at PoS because if a fraud takes place you can raise a dispute & it is not your money
4.You can also rub off the CVV Number(at the backside of the ATM Card) to be extra careful. But remember it so that you
can continue using the card for dong online txns.
5.Use computer that have anti-virus software for doing financial txns
6.Don’t share passwords, PIN’s & OTP(One-Time-Passwords) with anyone
7.Do not click/log into any links sent on e-mails that require you to revalidate your credentials like User ID/Password

14. Anup George Rebello
Asst.Manager
The Catholic Syrian Bank Ltd