Face to Face with C.S.Gopinath, AVP, HDFC Bank

Housing Development Finance Corporation, a key player in housing finance entered into the banking sector in a big way. HDFC bank with a info technology infrastructure is playing a vital role. It is one among the leading new generation private sector banks.

HamaraShehar Special correspondent met Mr.C.S.Gopinath Assistant Vice President, HDFC bank. He is a computer savvy and has in-depth knowledge about e-banking. He gave interesting figures and facts in the banking sector with an e-touch.

Q. Housing Development Finance Corporation, what made you to diversify into banking sector?

A. Narasimhan committee recommendations about finance sector reforms in 92-93 adopted by the government in pursuance with several groups started banking with a new direction. HDFC has a very good retail base with middle-income group, by way of giving home loans. HDFC started the banking venture with 26% equity. 20% equity joint venture with partner Nat west markets a subsidiary of National West Minister Bank, London and it is one of the top five banks in the world. However, their stake was sold to Chase Manhattan Bank, New York. Today, 15% of the equity is managed by them. The initial public offer at par Rs.10/- per share was overwhelming. It has 55 items over subscribed. Today the shareholders hold a fortune. Rs.10/- is richer by 25 items. This is the only bank where the stock has grown tremendously. SBI share of Rs.100 is Rs.175/- approx, GTB Rs.10/- at Rs.90/- approx, IDBI Rs.18/- at Rs.20/- approx and ICICI Rs.35/- around Rs.120/-.

Q. How well are you placed amongst the new generation private sector banks?

A. We are the leaders in the IT field among new generation private sector bank's. From the day we started the concept of centralised database, all the accounts of our customers are in the main server in Mumbai and are connected either through V-Sat or data circuit lines with all the branches. The only bank, where transactions are carried on real time basis. This makes our standing strong. HDFC Bank has emerged as Business India's best bank for the year 2000.

Q. What specialised services do you offer?

A. The bank is strong in retail banking with over 1.1 million customers across the country. We provide worlds best service with nominal minimum balance. We have net banking, phone banking with the help of IVR (interactive voice recorder), it is 24 hour banking. We have a very special card called debit card and ours is the only bank with a visa link. If you have an account with us you need not come to the bank to draw the cash. Eight million outlets access this debit card. We have one more feature mobile commerce, which will give access on you cell. Online real time balance will be displayed within no time. These are some of the special features.

Q. How well is your bank connected with e-commerce?

A. Ours is the only bank providing B-C solutions (Business-Consumer). Easy2shopee.com is owned by the HDFC Bank. Through which people in Mumbai can do all their purchases. Goods will be delivered and HDFC account or credit card will be debited. This is a good development in the banking sector. Ours is the only site where transactions are done without any human intervention. It is absolutely safe to give information. For example Malamal, e-wonder has a tie up for payment gateway with us. We have a terminal for demo in regard to e-business for our customers. The motto is no customer should come all the way to the bank. They should be in a position to do banking by using cell, phone and computer. We are major depositary participants. We have cash and shares in e-form. We have 20 thousand crores worth of shares in demat form.

Q. Do you have a well-planned ATM network?

A. ATM (Automatic Teller Machine) is a tool; it should be helpful to customers. Across the country, we have 144 ATM's. Our ATM's are not only for our customers but also for Visa, Master and American Express cardholders. We have the connectivity they can credit/debit, though HDFC ATM's. Average transactions are 300 per day per ATM. Other ATM's has only 75-85 per day. Economically, it will be unviable to have more ATM's with less traffic. We should see the demand before expansion. In two months time, we are planning five more ATM's in the city, the total rising up to 12. We have a switch base 24, which makes the transactions on real time basis. Three days holiday, mischief can be played with offline ATM's, very few banks have this online ATM facility.

Q. Foreign banks emergence, did it effect Indian banking scenario?

A. No is my stern answer. We are no less in infrastructure and services. For example, if one has to maintain minimum balance of Rs. One lakh approximately in foreign banks for saving bank account, but with the minimum of Rs. 5000, we provide worlds best service. So, my question is in what way foreign banks emergence will cause trouble?

Q. Are you a votary of week public sector banks merger and your opinion about privatisation of national banks?

A. Consolidation can happen. It will only strengthen. Merging will not affect the depositors in any way.

I don't consider it as a threat. Every one has their own share. We started with IT Technology and are far ahead. If privatisation takes place they have to start from the scratch. It will take time for them to match with us. So in no way will it be a threat.

Q. New generation private sector banks have any plans to spread their operation even to rural areas?

A. Basically, we have no bar for spreading. Biggest hurdle is inability of connectivity with IT. We have thin staff contingent. Only 2000 approx employees handling approx 15-16 thousand crore business. Where as Andhra Bank almost with the similar turnover has approx 17000 employees.

Q. In today's world, insecurities about money has increased thanks to non-banking finance companies. How do you plan to convince people about your services?

A. Historical developments in the banking industry have taken place. 30-year-old scheduled commercial bank with RBI intervention gets merged with another bank. Sikkim Bank merger with Union Bank of India is an example. The regulation to run a bank is more stringent than NBFC's. Every Rs.100 collected as a deposit year mark Rs.35 as CRR (Cash reserve requisitions) and Rs.25 as SLR (Security Liquid Reserve) with RBI. However, there is insurance over for Rs. One Lakh through RBI with DICGC (Deposit Insurance and Credit Guarantee Corporation). They will protect small depositors interest. If anything goes wrong, one lakh rupees will be paid off. RBI surveillance is for more profound than surveillance of NBFC's. So this speaks for the banking services.

Interview by - Mrs. Lakshmi Mantha.