Banking reengineered: Perspectives from Ajay Kapoor, EVP at HDFC Bank

FY Teng

How large is your network at present and what targets do you have for its expansion that you want to achieve by the end of this year?
As of December 31, 2013, the Bank had a distribution network with 3,336 branches and 11,473 ATMs in 2,104 cities/towns. Our recent expansion has been focused on the semi-urban and rural areas of the country. At a national level, semi-urban and rural branches account for 53 percent of our total branch network. Last year out of the 518 new branches opened by the bank, 88% of them were located in semi-urban and rural areas. We will continue to see steady growth at a comparable pace during the next few fiscal years as well.

Tell us about the expansion of your retail product offerings.
As far as product offerings are concerned, we have the complete suite of products for any retail customer. Whatever a retail customer requires of a bank, I would say, we have. We can see to those needs to cover his or her entire life cycle. We have products for kids, we have products for the salaried employees...We have credit card and loan facilities. We also have investment products, such as mutual funds and insurance, which we offer in conjunction with reputable third parties. We have the entire bouquet of products that we offer to all of our customers and their availability and coverage are not restricted by where they are physically located or which branch through which they established their relationship with us.

What are you currently doing on the Cloud?
We are not doing much as far as the public Cloud is concerned. Everybody has been talking about the public Cloud for so long, but if you look at it in terms of its deployment in the financial services industry, you can see that it still raises quite a bit of concern on the kind and level of security it on it. Largely, in my experience people are  using the public Cloud for non-critical or non-financial activities. I think for financial services, it has a long way to go before they can feel comfortable about putting their applications on a public Cloud.

However there are some initiatives that our bank has taken which are more on the private cloud. Like internally how we can make the resources available to multiple applications during the peak time or how we can optimise our IT footprint. From that perspective, we have done some work. That's to address the difficulty we sometimes encountered in the past to do with providing the capacity to all the relevant people at the bank that matches their volume peaks for all their applications at the same time. At HDFC Bank, we have more than 200 IT applications running simultaneously, catering to multiple kinds of needs within the bank. Each business segment has multiple applications running at the same time. And our business is such that for most if not all of them, the demand for capacity tends to peak out roughly during the same period each month. The business cycles are such that there's usually a volume surge for each segment round month end or during the festive season.

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