Housing Development Finance Corporation  

Organisation and Management:

HDFC is a professionally managed organisation with a Board of Directors consisting of eminent persons representing various fields including finance, taxation, construction and urban policy and development. The company has a highly experienced senior management team headed by the Chairman, Deepak Parekh, Managing Director, Deepak Satwalekar, Executive Director K M Mistry and several general managers.HDFC operates through 45 branch offices located throughout the country with its corporate headquarters in Mumbai, India. It also has an international office in Dubai, UAE, with service associates in Kuwait, Oman and Qatar. HDFC has made loans available in over 2,400 towns and cities through its branches and outreach programmes.

Background:
Incorporated in 1997 with a share capital of Rs 100 million, HDFC has since emerged as the largest mortage institution in the country. Promoted by the Industrial Credit and Investment Corporation of India, and with initial investments from the International Finance Corporation and the Aga Khan, the corporation has had a series of share issues raising its capital to Rs 1.19 billion.

Objectives:
The primary objective of HDFC is to enhance residential housing stock and to promote home ownership. One of HDFC's major objectives is to increase the flow of resources for housing through the integration of housing finance institutions with the domestic capital market. During the past decade, HDFC has nurtured the development of a housing finance industry by helping to promote housing finance institutions in partnership with commercial banks and private sector institutions.

Housing Finance Sector:
The housing finance sector has assumed significance in the financing of housing in the country. Formal institutions provide about 14 percent of total housing in India. If other non-specified financial formal sector contributions are included, this ratio rises about 32 percent. The creation of the National Housing Bank as a supervisory institution has helped to regulate and support the emerging structure.

Operations:
HDFC commenced operations as a mortage bank. It raised large wholesale resources (domestic and international) and lent retail primarily to individual households. In mid-1991, it entered the retail deposit market by offering savings and investment opportunities to households in competition with other instruments in the financial market. As a result of a focused strategy, the number of depositors have risen from 56,000 in 1991 to over, 9,58,000 in 1998 (financial year).

Much of this success is also due to the significant contribution made by HDFC's growing number of authorised deposit agents, who now number over 42,000. HDFC had instituted well defined service standards for both depositors and deposit agents which are carefully and continiously monitored to ensure that service levels are not only maintained but significantly improved even though the number of transactions are increasing very rapidly.

HDFC provides multiple products on both sides of its balance sheet in order to provide services that are best suited to its customer base. Cumulative approvals and disbursements as of March 31, 1998 were Rs 4.33 billion and Rs 4.33 crore and Rs 3.01 billion respectively.

International Borrowings
HDFC has had the distinction of being the first Indian private sector institution to raise funds under the USAID Housing Guaranty Program. The amount raised under the Program was US$ 125 million. HDFC subsequently structured innovative currency and interest swaps to lock into a rupee funding at fixed rates. HDFC also availed a loan of US$ 40 million from the International Finance Corporation (IFC), Washington.

HDFC has availed of a loan of pound sterling 25 million from the Commonwealth Development Corporation (CDC), London. This is the largest loan of its type disbursed by CDC to any Indian institution.

The Future
"HDFC has developed a network of institutions to serve its customer base with specialised financial services through partnerships with the best institutions in their particular fields of activity worldwide.HDFC proposes to enter into the now nationalised insurance sector, once this sector is deregulated and the regulatory frameworks are in place. Insurance has direct links with the comparative advantages that HDFC had developed over the years. Insurance has very close links with housing finance (both being long term financial commitments). HDFC has also submitted a proposal to the Securities and Exchange Board of India (SEBI) to launch a Real Estate Mutual Fund' says HDFC Public Relations Manager, Mahesh Shah.

Address: HDFC, Ramon House, H T Parekh marg, 169, Backbay Reclamation, Mumbai - 400 020,
Phone: 282 0282 / 283 6255
Fax: 204 6758 / 204 6834
e-mail: webmaster@hdfcindia.com
website: www.hdfc.com

By :Mani D'Mello

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