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HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED

BUSINESS LEADER H.T. PAREKH (FOUNDER): Born on March 10, 1911 in a banking family at Surat, Mr. Hasmukh Thakordas Parekh, fondly referred to as Hasmukhbhai was the doyen of the Indian housing and financial sector. A graduate in Economics from Mumbai, Mr. Parekh also pursued a BSc. degree in Banking and Finance from theLondon School of Economics. Mr. Parekh began his financial career with a leading stockbroking firm, Harkisandass Lukhmidass. Simultaneously, he was a lecturer in Economics at the St. Xavier's College in Mumbai for about three years. During this period Mr. Parekh also continued to study and write on different aspects of the economy and economic policy, money and banking, and also participated in public discussions For decades he had been stressing the need for a financial corporation specializing in providing long term finance for ownership housing. Thus even at the age of 66, when most people think of retirement, Mr. Parekh was determined to set up his most ambitious enterprise. His lifelong dream of helping Indians own their home, as he had seen abroad during his student days, led to the formation of the Housing Development Finance Corporation Limited (HDFC) in 1977. It was the first-of-its-kind in India. It is under Mr. Parekhs leadership and direction that HDFC grew manifold while being strongly rooted in the principles of integrity, transparency and professionalism. Soon HDFC became a major role model not only for the country but for the entire Asian region. His wisdom and warmth drew people from all walks of life to him for advice, guidance and inspiration. Mr. Parekh was a man of few words, and believed that strong views need not be expressed in strong words. He had a keen eye for talent and nurtured it by providing direction and ample learning opportunities.

Known for his humility, affection and concern for fellowmen, Mr. Parekh was associated with several philanthropic causes and welfare organizations. Some of Mr. H.T. Parekhs major achievements are:

The James Taylor prize for standing 1st in B.A. (Economics) from the University of Mumbai. Honorary Fellow of the London School of Economics and Political Science, U.K. Padma Bhushan by the Government of India for his contribution to the field of economic activities in 1992.

DEEPAK PAREKH : Deepak Parekh is the Chairman of Housing Development Finance Corporation, India's leading housing finance company. A pioneer in mortgage finance, he has enabled scores of Indian middle class people to own their houses or apartments through affordable loans. He is based in Mumbai.[1] A Chartered Accountant, Deepak Parekh began his career with Ernst & Young Management Consultancy Services in New York. After returning to India, he worked with Grindlays Bank and also Chase Manhattan Bank as its assistant representative for South Asia. Parekh joined HDFC in 1978. He was promoted to Managing Director in 1985 and appointed as Chairman in 1993. HDFCs growth in stature and strength since its inception has been achieved by a steadfast focus on sound values such as integrity, transparency and professionalism, and underpinned by a basic belief of trust by the Indian middleclass. Mr. Deepak Parekh has not only preserved the ethos of the company but strengthened it with time. His acute business acumen and farsightedness has not only made HDFC a leader in Mortgages, but also transformed it into a financial conglomerate with presence in Banking, Asset Management, Life Insurance, General Insurance, Real Estate Venture Fund and an Education Finance company. He was instrumental in making the HDFC one of India's premier housing finance institutions. Parekh also became the Non-Executive Chairman of Infrastructure Development Finance

Company Ltd (IDFC), a Government of India enterprise for infrastructure projects in 1997. He is also the Non-Executive Chairman of Glaxo India Ltd & Burroughs Wellcome (India) Ltd., Siemens Ltd, Mahindra & Mahindra, Indian Hotels Company and SingTel. Mr. Parekh is also extremely supportive of youth leadership and thus is a proactive advisory board member of the world's largest student driven organization AIESEC India. In addition to be known for his vociferous views seeking standardization and transparency in real estate sector, Mr. Parekh is considered as the unofficial crisis consultant of the government. Be it his role as Special Director on Satyam Board in 2009 to revive the company or the crucial role played by him sometime back during the UTI Mess to recommend measures for sustaining investor confidence. Mr. Parekh has always been willing to share his ideas and experience to formulate reform policies across sectors. This at times has also meant advising the government to take hard decisions. A man with a mission, Mr. Parekhs philosophy on Corporate Social Responsibility is simple yet profound. He believes that if a company earns, it must also return to the society, and that companies owe a responsibility not only to the shareholders, but also towards all the stakeholders. Mr. Parekh was awarded the prestigious Padma Bhushan (Indian civilian decoration) by the President of India in 2005.

ETHICS

Housing Development Finance Corporation HDFC is the sole Indian company figuring in a New York City think tank's fifth annual list of the World's Most Ethical Companies.

The Ethisphere Institute's list, which includes 110 organizations, the largest since the award's inception in 2007, does not have a ranking. Nearly 3,000 companies in more than 100 countries and 36 industries were nominated-or nominated themselves-to be considered this year. The 110 companies that made the final cut this year include first-time recipients Adidas, eBay, Microsoft, Colgate-Palmolive and 30 other newcomers. Ethisphere's proprietary rating system, which it calls the Ethics Quotient, is based on a series of multiple-choice questions in a survey that is designed to capture a company's performance in an objective and standardised way. In particular, companies realized that they could use ethics to help drive profit and use them as a competitive advantage. Finding this profit is what makes ethics and compliance as business activities sustainable beyond simply being the right thing to do. The Worlds Most Ethical Companies list (referred to as WME) recognizes companies that truly go beyond making statements about doing business ethically and translate those words into action. WME honorees demonstrate real and sustained ethical leadership within their industries, putting into real business practice the Institutes credo of Good. Smart. Business. Profit.

Housing Development Finance Corporation (HDFC) has the following ethical qualities that make it one of the most ethical companies of the world and the most ethical company of India:

Integrity Track Records And Reputation :

HDFC has a clean legal record and maintains good reputation with the customers as well as the markets.

Internal Systems and Ethics/Compliance Program : HDFC has an excellent internal control system, including a leading code of conduct, whistle blower policies and detection control.

Industry Leadership : HDFC sets high industrial standards for business ethics / compliance, corporate governance, responsibility, sustainable development, environmental protection.

Executive Leadership and Tone from the Top : HDFC has a strong executive leadership on ethics, corporate governance and citizenship.

Corporate Governance : HDFC is properly aware of potential value conflicts at and around the company and is able to address them effectively.

Innovation : HDFC provides products and services that positively contribute to public well being.

SOME OTHER POLICIES FOLLOWED BY HDFC:

Objectives

Follow good, fair and transparent business practices by setting reasonable standards;

Encourage market forces, through fair competition, to achieve higher operating standards; Relate to the customer in such manner so as to promote a fair and cordial relationship; Set such standards and practices so as to foster confidence in the housing finance system.

Application

To be applicable to all persons offering the Products and Services of the Corporation as an employee or otherwise in any manner and/or by any mode.

The Code is applicable under normal operating environment except in the event of any force majeure.

The Code is based on ethical principles of integrity and transparency and all actions and dealings shall follow the spirit of the Code.

The above ethical policies followed by HDFC, have set a new standard of ethics in the housing sector and have also been instrumental in earning a place in the coveted list of Most Ethical Companies of the World. This has helped the company in building up its brand image as a trusted and ethical company and has thus won the hearts and confidence of many customers and prospective customers as well.

STRATEGIES

HDFC was incorporated in 1977 by Mr. Hasmukhbhai Parekh with the primary objective of meeting a social need - that of promoting home ownership by providing long-term finance to households. The launching of HDFC was meant to be one small step in dealing with the

availability of housing accommodation in India which was then virtually non-existent. HDFC as a pioneer launched India's first specialized home loan company with an initial capital of Rs. 100 million. Business Objective: HDFCs primary objective is to enhance residential housing stock in the country through the provision of housing finance in a systematic and professional manner, and to promote home ownership. HDFC aims to increase the flow of resources to the housing sector by integrating the housing finance sector with the overall domestic financial markets. Goals:

Develop close relationships with individual households. Maintain its position as the premier housing finance institution in the country. Transform ideas into viable and creative solutions. To grow through diversification by gaining leverage from our existing client base. To nurture the values and ethos of Brand HDFC through all its Subsidiaries and Associate Companies.

Growth strategies:

Increase the return on equity each year by 1 percentage point in order to maximise shareholder value;

Maintain gross Non-Performing Assets (NPAs) below 1%; Consistently grow the loan book;

Since 2008, the dream of owning a home became dearer to an average Indian. What started as a cautious watch before taking decisions later became holding back buying by most buyers and waiting till the tides turned. The recession of the west was slowly but surely making its effects felt here. We put on our thinking caps to offer solutions that helped our customers negotiate the tough times.

One such step was of educating customers to explore options of buying a house on resale, where the prices were affordable and the monthly outgoings became comparatively reasonable. To aid this process, HDFC launched Resale Assist an initiative that brought buyers and real estate agents on one platform. To further assist customers in finding their perfect dwelling HDFC introduced the concept of Property Gallery. Starting at Nagpur with a test launch HDFC have created a miniature experience of local property landscape and made available information crucial to the home selection process. The efforts have stated bearing fruit and there is a shift in mindset not only of the customers but even developers, who are now offering 1and 1.5 BHK flats respecting the changing trends. Slowly but surely, a balanced approach will help the industry tide over the difficult times. Our homes are but an extension of our warmth and love. They express our personalities and help us form our relationships with the society. To safeguard this little piece of heaven where we belong, it is important that we conserve our resources to help us in difficult times. This is why HDFC has been consistently promoting our Deposit Products, which promise to keep the customers deposits safe and secure, besides assuring steady returns. This means that HDFC joins them as partners in planning and execution and suggest ways to live a settled life today while working for their future. These well planned and farsighted strategies in these hard times have given customers a relief and a reliable institute to rely on and solidify their future, and in turn have born its fruits to the company and have taken HDFC to an unprecedented success in their basic objective of providing affordable home loans. SWOT ANALYSIS OF HDFC

STRENGTHS: Right strategy for right products.

Superior customer services vs. competitors. Great Brand Image. Products have acquired accreditations. High degree of customer satisfaction. Lower response time with efficient and effective services. Dedicated workforce aiming at making a long-term career in the field.

WEAKNESSES:

Some gaps in range for certain sectors. Customer service staff needs training, processes and systems. Management cover insufficient. Sectoral growth is constrained by low unemployment levels and competition for staff.

OPPORTUNITIES: Could extend to overseas broadly. New specialist applications. Could seek better customer deals.

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Fast-track career development opportunity on an industry-wide basis. An applied research centre to create opportunities for developing techniques to provide added-value.

THREATS:

Great risk involved. Very high competition prevailing in the industry. Vulnerable to reactive attack by major competitors. Lack of infrastructure in rural areas could constrain investment. High volume/low cost ....market is intensely competitive.

INNOVATIONS

Innovations form a very important part of the progress of the company. Innovations are important for any company as innovations form the change that every company makes to keep pace with the times.

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Innovations made by HDFC have ushered in new heights of success. Some of the innovations by HDFC in the sector of home loans are: HOME IMPROVEMENT LOANS: The interiors of any home reflect the personal preferences and tastes of its owners making it imperative to constantly upgrade to keep up with changing times. With HDFC's Home Improvement Loans you can now renovate your existing space for a more comfortable environment and a better quality of living. This renovation loan facilitates internal and external repairs and other structural improvements like Painting, Waterproofing and Roofing, Plumbing and Electrical Works, Tiling and Flooring, Grills, Aluminum Windows compound walls and much more.

HOME EXTENSION LOANS HDFC provides Home Extension Loans for adding more space to your existing home for meeting the requirements of your growing family be it an extra bedroom for your children, a reading room for yourself or a cozy coffee corner. We make it easy to extend your home anyway you like.

SHORT TERM BIDDING LOANS HDFC Short Term Bridging Loans provides you with the much-needed finance during the interim period between the sale of your old home and the purchase of a new home. LOAN FOR PROFESSIONALS

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HDFC offers loans exclusively for professionals such as doctors, chartered accountants, lawyers and other self-employed professionals for construction, purchase, extension or renovation of their office or clinic. TOP UP LOANS This product offers an existing resident Indian customer a loan against the mortgage of the existing property. It helps in encashing the investment in a house without having to dispose it off to fund various needs related to Higher Education, Purchase of Furniture, Business Requirements, etc. The maximum loan amount under this product is 70% of the market value of the property less the outstanding loan and is subject to the current loan eligibility. The maximum term of the loan is 10 years. Top up loans can given after 1 to 2 years [based on our discretion], of the final disbursement of the existing loan or upon possession/completion of the existing financed property. Due to innovations such as these, the company has extended its spectrum of loans from only housing loans to various other sections and still maintaining their fundamentals intact. Giving away loans for Home Extension, Home Improvement, Short Term Biding Loans, etc. HDFC has certainly brought in customers not looking for home loans. INFRASTRUCTURE DEVELOPMENT

DISTRIBUTION NETWORK : HDFC's distribution network spans 277 outlets that include 64 offices of HDFC's distribution company, HDFC Sales Private Limited (HSPL). In addition, HDFC covers over 90 locations through its outreach programmes. Distribution channels form an integral part of the distribution

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network with home loans being distributed through HSPL, HDFC Bank Limited and other few third party direct selling associates. To cater to non-resident Indians, HDFC has offices in London, Dubai and Singapore and service associates in Kuwait, Oman, Qatar, Sharjah, Abu Dhabi and Saudi Arabia - Al Khobar, Jeddah and Riyadh.

HDFC SALES:

HDFC Sales is a wholly owned subsidiary of HDFC Ltd. The company has been floated as a distribution arm of HDFC with an objective of offering doorstep service to prospective clients of HDFC group. HDFC Sales offers financial management solutions to individuals encompassing among other products Home Loans, Life Insurance, Mutual Funds, Fixed Deposits and property Solutions. Home Loans: HDFC Sales is present in over 100 locations across the country with 55 offices and over 1750 employees. Financial Management: HDFC Sales offers financial management solutions in 9 cities and is continuously expanding its reach. HDFC Sales employs sales persons across all spectrums of financial management enabling them to meet a range of financial needs. HDFC Realty: HDFC Sales manages the HDFC Realty business and the Website (hdfcrealty.com) which offers property solutions buying, selling, leasing to Individuals and Corporates. HDFC Realty is present in all the major cities in India as well as in Dubai. The company mirrors the philosophy and values of its parent, HDFC. The development of such an effective infrastructure over various regions has helped the company reach out to the farthest corners of the country and also to various regions around the globe.

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REFERENCES

HDFC Company Website: www.hdfc.com

HDFC Thirty Fourth Annual Report 2010-11.

HDFC Thirty Third Annual Report 2009-10.

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HDFC Thirty Second Annual Report 2008-09.

2010 Media Responsibility Report, ETHISPHERE.

Website: www.managementparadise.com --http://www.managementparadise.com/forums/business-environment/202033swot-analysis-hdfc.html

www.wikipedia.com --- http://en.wikipedia.org/wiki/HDFC

www.google.com

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