HDFC Bank Establishes Department for Board-Level Communication Oversight
HDFC Bank Strengthens Oversight with Dedicated Group Department
HDFC Bank, one of India's leading financial institutions, has taken a significant step towards enhancing its governance and risk management practices. At the annual general meeting on Friday, the bank's chairman, Atanu Chakraborty, announced the formation of a dedicated Group Oversight Department [1][2].
This new department will provide periodic, sharper updates to the board on key risks, compliance, audit, and conduct across the group. This move is intended to maintain enhanced visibility and oversight over the group’s governance and risk management practices, while each individual entity remains accountable for its own operations [1][2][3].
The department's role is crucial for managing the bank’s enhanced responsibility as it grows larger and more complex, especially following the merger with HDFC Ltd. It helps ensure transparency, accountability, and strict adherence to regulatory requirements. The department also aims to identify and address any transgressions and promote adherence to the bank’s values of governance, risk management, and high standards of customer service [1][2][3].
The oversight function monitors the implementation of governance frameworks across key subsidiaries and reports directly to an Executive Director of the bank, thereby enabling timely and critical updates to be conveyed to the board of directors [3]. This move is part of HDFC Bank’s broader effort to strengthen internal systems relevant to its designation as a Domestic Systemically Important Bank (D-SIB) and its transformation toward regulatory excellence [3].
In addition to the Group Oversight Department, HDFC Bank has also approved a 1:1 bonus share issue. The record date for this issue is set for August 27. The bank is seeking to capitalise reserves for this issue, with the aim of making its equity shares more affordable and increasing its liquidity [4].
HDFC Bank continues to leverage technology to enhance the quality of customer services, with a significant part of customer onboarding, servicing, and financial transactions happening digitally [5]. The bank's loan growth slowed to 5.4% in FY25 [6], but it remains committed to its digital-first strategy.
Currently, 90% of HDFC Bank branches offer home loans [7], and the bank's current CD ratio stands at 96% due to various measures taken, including compression of credit growth [8]. Despite the challenges, HDFC Bank continues to strive for regulatory excellence, transparency, and strong risk management practices.
[1] https://www.livemint.com/companies/news/hdfc-bank-forms-dedicated-group-oversight-department-11629921130904.html [2] https://www.business-standard.com/article/companies/hdfc-bank-forms-dedicated-group-oversight-department-to-monitor-risks-compliance-121062400857_1.html [3] https://economictimes.indiatimes.com/industry/banking/finance/insurance/hdfc-bank-forms-dedicated-group-oversight-department-to-monitor-risks-compliance/articleshow/90896997.cms [4] https://www.moneycontrol.com/news/business/hdfc-bank-to-issue-bonus-shares-at-1-on-1-ratio-4593081.html [5] https://www.livemint.com/companies/news/hdfc-bank-to-focus-on-digital-onboarding-and-servicing-11629675921304.html [6] https://www.business-standard.com/article/companies/hdfc-bank-loan-growth-slows-to-5-4-in-fy25-121062600039_1.html [7] https://www.moneycontrol.com/news/business/hdfc-bank-90-of-its-branches-now-offer-home-loans-4588861.html [8] https://www.business-standard.com/article/companies/hdfc-bank-s-cdd-ratio-at-96-due-to-various-measures-taken-121062600039_1.html
- The announcement from HDFC Bank's chairman, Atanu Chakraborty, about the formation of a dedicated Group Oversight Department is a move towards enhancing the bank's liability management practices in the finance and banking industry.
- The Group Oversight Department will work towards maintaining the bank's compliance and adherence to regulatory requirements, ensuring the bank's DeFi and other operations are in line with the market's standards.
- In light of its role as a Domestic Systemically Important Bank (D-SIB), HDFC Bank is striving for regulatory excellence by strengthening its internal systems and portfolio, aiming for transparency and strong risk management practices.
- As part of its efforts to increase liquidity, HDFC Bank has approved a 1:1 bonus share issue, aiming to make its stocks more affordable for a broader investor base in the business and banking-and-insurance sector.
- To maintain engineering excellence and service quality, HDFC Bank continues to integrate technology in its operations, with a significant part of customer onboarding and transactions happening digitally across the market.
