AP: We revolutionised the way stock market and banks interacted with each other – we have a tripartite agreement between the bank, broker and the exchange. We are the clearing bank for the National Stock Exchange – gradually now all exchanges deal with us – NSE, BSE, Calcutta, Delhi, and Ahmedabad.

70% of the brokers have their accounts with us and 60% of the stock settlement in the country is done through us. We have just launched our HDFC Securities that has tremendous benefits to overseas customers and locally too. With HDFC Securities account you can actually trade on the net – your transaction is done and you have confirmation - all in 5 minutes .

We are now opening almost 4500 accounts a day countrywide – by March 2001 this figure should be 5000-6000 accounts a day – that is about 120,000 accounts a month and it gives you 1.25 million accounts a year – we have 1.3 million customers already.

Our plans are very ambitious – we have got the infrastructure, the people, the products, we are expanding geographically- we are opening 40-50 branches a year – we are putting in 200 ATMs a year – we are already in debit cards – we are launching credit cards in January 2001 – we will be the first to launch with MasterCard, Visa and American Express.

We benchmark ourselves internationally – on all ratios – whether it is return on equity, revenues to expenses, technology, products offered, cost per transaction and our P multiple is among the highest in the world – our cost/expense ratio is one of the best - our return on equity is among the top three in the world. In technology and flexibility we are ahead of many – a lot of international banks have not brought those products into India – for instance Hong Kong, Charter, Grindlay – they are not onto net banking – they don’t offer web-enabled banking – they don’t have an international debit card – they have credit cards but not with American express – and they don’t have a complete product offering – we have a larger product range, bigger geography, and better brand.

Technology has obviously had a very important role in it. Technology had normally been considered a support function. We wanted enabling-technology – technology that would enable us to deliver a better product to the customer at a lower price to the bank – for us technology is a part of the business – it is not a support function – in some cases the focus may be a reduction of costs- in other cases it may be eliminating the constraints of geography – but technology is the key. Our vision statement clearly states that we will use enabling technology to provide latest products and services across business segments at a value for money price. I think the way things have changed – the macro environment has also helped us because the options on technology are phenomenal. You can convert technology into enabling technology – we do not use technology for the sake of using technology.

t-s-a: Do people have confidence in banking technology?

AP: Oh yes – phenomenal. For instance, today our ATMs have the highest usage in the world – most of our ATMs are doing 14000-15000 transactions a month. Even in internet banking the growth rate of number of people signing on is among the highest in the world. Earlier, you did not have the bandwidth, it took too long to log on, it was high-cost, the access device was limited only to PCs – now things are different and changing – there are internet kiosks and there is telephone banking , PCs have become cheaper, cost of internet has gone down.

The bottom line of Old economy, New economy really is how well you use the changing environment and infrastructure to provide a better service to the customer at a better profit to the bank. Net is a facility. For NRIs it opens geography A particular segment of the people only want to deal on the net. We have to make technology convenient – the person on the other side must feel comfortable using it. I have a mandate out that if a person has to deal on the net he must not make more than 3 clicks to get all the information he wants. This may seem simple but it really makes a difference. He must have a personalised page. These are small things but they matter. Now the entire business community is realising that if you have to convert eyeballs into revenue you have to make technology friendly to the human being – it must provide convenience. We have also put in very strong customer relationship management systems and data warehousing systems.

t-s-a: What were the success factors?

AP: We got a good team, market was right and God’s Grace - and the fact that HDFC was already a well-established brand. It has been a challenge and we have enjoyed it thoroughly. God has been kind.
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