Your Directors take great pleasure in presenting the 31^st Annual
Report on the business and financial operations of HDFC Bank
Limited (“HDFC Bank” or “Bank”), together with the audited
accounts for the year ended March 31, 2025.

The Bank's key financial parameters continued to be healthy,
due to its robust credit evaluation of targeted customers and a
well-diversified loan book across sectors, customer segments
and products. Its performance is an outcome of its disciplined
approach to managing risk and return.

The Indian economy is expected to remain one of the fastest
growing economies in 2025-26. RBI has forecast GDP growth
of 6.5 per cent. Rural demand is expected to be healthy on
account of robust agricultural output, lower food inflation and
easing input costs. Urban consumption is also likely to benefit
from tax cuts announced in the Budget, reduction in interest
rates by the RBI and moderating inflation.

Global growth stood at 3.3 per cent in 2024, which was below
the historical average. The growth in countries like the US
remained strong at 2.8 per cent, while the growth contracted
or remained muted in the Eurozone, Japan and UK.

For more details, please refer to the Macroeconomic and
Industry section on page no. 214.

In this changing environment, your Bank continued to
prioritise growth while strengthening its focus on governance,
sustainability and inclusive development.

I Financial Parameters

The results for the year ended March 31, 2025 include the
operations of Housing Development Finance Corporation
Limited (“HDFC Limited”) and its subsidiaries (which became
subsidiaries of the Bank on amalgamation) effective from July
01, 2023 and hence are not comparable with results for the
year ended March 31, 2024.

I Based on Standalone Financial Statements

The income statement reflected a growth in revenue comprising
Net Interest Income and Non-Interest Income. While the former
grew by 13.0 per cent, the latter fell by 7.33 per cent year-
on-year. On an overall basis, Total Net Revenue for the year
ended March 31, 2025, reached ' 1,68,302.4 crore, reflecting
an increase of 6.7 per cent over the previous year.

Net Revenue Distribution

Net Profit increased by 10.7 per cent to ' 67,347.4 crore from
' 60,812.3 crore. Return on Average Net Worth was 14.56
per cent while Basic Earnings Per Share was ' 88.29 up from
' 85.83.

Net Profit

Total Advances grew by 5.4 per cent and Total Deposits grew
by 14.1 per cent year-on-year. Net Interest Margin (NIM) was
at 3.48 per cent.

Growth in Advances and Deposits

Gross Non-Performing Assets (GNPAs) stood at 1.33 per
cent as against 1.24 per cent. This is amongst the lowest in
the industry.

I Merger

Two years into the merger, the integration of HDFC Limited's
home loan expertise with HDFC Bank's scale and reach has
solidified our position as a leading financial institution. Our
enhanced capacity to support large-scale and infrastructure
financing underscores our continued commitment to nation¬
building and job creation. As our role expands, so does our
emphasis on strong governance across the HDFC Bank
Group. We remain steadfast in upholding ethical practices,
transparency, and strong risk management-ensuring we
retain the trust that defines our legacy.

I Parivartan

Parivartan, HDFC Bank's CSR initiative, is dedicated to
supporting the inclusion of economically and socially
disadvantaged groups by fostering growth, development and
empowerment. With a commitment to creating sustainable
ecosystems, it identifies and supports programmes that
nurture and uplift communities.

Parivartan concentrates on six key areas:

1.    Rural Development

2.    Promotion of Education

3.    Skill Development & Livelihood Enhancement

4.    Healthcare & Hygiene

5.    Financial Literacy & Inclusion

6.    Natural Resource Management.

Each of these pillars is designed to foster holistic growth and
empower communities, ensuring sustainable and inclusive
development. Through Parivartan, your Bank has reached out
to underserved communities in the tribal belt, border villages
and locations with limited access. The Bank through its Holistic
Rural Development Programme (HRDP), has worked towards
creating self-reliant villages.

Your Directors are pleased to announce that the Bank
successfully fulfilled its CSR obligation for the Financial Year
2024-25.

For further details on Parivartan please refer to
pages 168 to 191.

I Summary

Indian GDP grew at 6.5 per cent in 2024-25. It had registered a
healthy average growth of 8.8 per cent over the previous three
years. This was due to moderation in urban demand as inflation
and elevated interest rates weighed on discretionary spending.

According to RBI, India is expected to grow at 6.5 per cent in
2025-26. Consumption demand in the rural areas is expected
to be supported on account of healthy agricultural output,
lower food inflation and moderating input costs. Urban
consumption demand will be supported by tax cuts, reduction
in interest rates by RBI and moderating inflation. The RBI has
reduced its policy rate by 100 basis points since February
2025, bringing it to 5.50 per cent. This along with liquidity
infusion is likely to help reduce borrowing costs and spur credit
demand in the economy.

In the year under review, the Bank focused on expanding
customer reach, maintaining balance sheet strength, and
advancing post-merger integration across business lines and
systems. As the scale and complexity of operations increased,
a formal Group Oversight Framework was introduced
to ensure alignment of governance and risk practices
across subsidiaries.

The Bank continued to contribute to national development by
enhancing access to financial services in underserved regions
and supporting rural prosperity through both commercial
and social initiatives. We remain committed to responsible
corporate citizenship by contributing to the development of
society and promoting sustainability.

These efforts are made possible by the resilience and
dedication of over 2,14,000 employees whose contribution
remains integral to the Bank's progress. We continue to focus
on attracting and retaining top talent, striving to be one of the
industry's premier employers.

I Mission and Strategic Focus

Your Bank's mission is to be a ‘World-Class Indian Bank'. Its
business philosophy is based on five core values:

•    Customer Focus

•    Operational Excellence

•    Product Leadership

•    People

•    Sustainability

Sustainability should be viewed in unison with Environmental,
Social and Governance performance. As a part of this your
Bank, through its CSR initiative Parivartan, seeks to bring
about change in the lives of communities mainly in rural India.

During the year under review, HDFC Bank continued building
a sound customer franchise across distinct businesses to
achieve healthy growth in profitability consistent with its
risk appetite.

The Bank is focusing on:

•    Delivering a better experience and greater
convenience to customers

•    Increasing market share in India's growing banking
and financial services industry

•    Expanding geographical reach

•    Cross-selling the broad financial product portfolio

•    Sustaining strong asset quality through disciplined
credit risk management

•    Maintaining low cost of funds

Your Bank remains committed to the highest levels of ethical
standards, professional integrity, corporate governance and
regulatory compliance. Every employee affirms to abide by the
Code of Conduct annually.

I Dividend

The Board of Directors of the Bank, at its meeting held on April
19, 2025, has recommended a dividend of ' 22.00 (Rupees
Twenty-two only) per equity share of ' 1/- (Rupee One only),
for the Financial Year ended March 31, 2025. This translates
to a Dividend Payout Ratio of 25.00 per cent of the profits for
the Financial Year ended March 31, 2025.

In general, your Bank's dividend policy, among other things,
balances the objectives of rewarding shareholders and
retaining capital to fund future growth. It has a consistent track
record of dividend distribution, with the Dividend Payout Ratio
ranging between 20 per cent and 25 per cent, which the Board
endeavours to maintain. The dividend policy of your Bank is
available on the Bank's website.

Issuance of Equity Shares and Employee Stock
Option Scheme (ESOP)

As on March 31, 2025, the issued, subscribed and paid-up
capital of your Bank stood at ' 7,65,22,21,674.00 /- comprising
7,65,22,21,674 equity shares of ' 1/- each. Further, 5,53,11,012
equity shares of face value of ' 1/- each were issued by your
Bank pursuant to the exercise of Employee Stock Options
(ESOPs) and Restricted Stock Units (RSUs).

For information pertaining to ESOPs, please refer Annexure 1
of the Directors' Report.

I Capital Adequacy Ratio (CAR)

As on March 31, 2025, your Bank's total CAR, calculated as
per Basel III Regulations, stood at 19.6 per cent, well above the

regulatory minimum requirement of 11.7 per cent, including a
Capital Conservation Buffer of 2.5 per cent and an additional
requirement of 0.2 per cent on account of the Bank being
identified as a Domestic Systemically Important Bank. Tier I
Capital was at 17.7 per cent as of March 31, 2025.

Management Discussion and Analysis

Macroeconomic and Industry Developments

India's GDP growth moderated to 6.5 per cent in 2024-25,
after registering a healthy average growth of 8.8 per cent over
the preceding three years. This was driven by a moderation in
urban demand as inflation and elevated interest rates weighed
on discretionary spending, growth in fixed investments
remained muted and government spending was off to a slow
start due to union and state elections in the first half of 2024¬
25. Further, Foreign Direct Investment (FDI) flows remained
weak as rising global uncertainty related to US tariff threats
led to outflow of capital in second half of Financial Year 2024¬
25. On the other hand, domestic growth was supported by
an improvement in rural demand conditions on the back of
healthy agriculture output. In addition, exports also added
positively to growth increasing by 6.3 per cent. Export growth
was led by strong momentum in net services exports, driven
by the continued expansion of global capability centers and
strong demand from large trading partners like the US.

From the supply side, manufacturing growth slowed in 2024¬
25 with a rise in input costs and slower volume growth while
service sector growth broadly held up above 7 per cent.
Elsewhere, growth in the construction sector remained healthy
at 9.4 per cent. The biggest support to growth came from
above trend growth in the agriculture sector, as favourable
monsoon conditions supported kharif output while healthy
reservoir levels and soil moisture conditions supported
rabi crops.

On the external front, global growth stood at 3.3 per cent in
2024 - below the historical average. While growth in countries
like the US remained strong at 2.8 per cent, growth contracted
or remained muted in the Eurozone, Japan, and UK.

Looking ahead, India is widely expected to remain one of the
fastest growing economies in Financial Year 2025-26, with the
RBI forecasting GDP growth at 6.5 per cent. Consumption
demand in the rural areas is expected to be supported by
healthy agricultural output, lower food inflation and moderating
input costs. Tax cuts, reduction in interest rates by RBI and
moderating inflation are likely to support urban consumption
demand. The RBI has reduced its policy rate by 100 basis
points since February 2025 bringing it down to 5.5 per
cent. This along with liquidity infusion is likely to help reduce
borrowing costs and spur credit demand in the economy.

The government is expected to continue supporting growth
through capital spending which is budgeted at '11 lakh crore
for 2025-26. In addition, with an improvement in demand

conditions, private capex is expected to also see some
recovery. At the same time accommodative monetary policy,
lower inflation and healthy balance sheets of financial institutions
and corporates are likely to support private investments.

Inflationary pressures started to ease towards the end of
Financial Year 2024-25, with headline Consumer Price Index
(CPI) averaging at 4.6 per cent from 5.4 per cent in Financial
Year 2023-24. Though inflation increased to a high of 6.2 per
cent in October 2024, it has continuously moderated since
then, reaching 3.3 per cent in March 2025. The moderation
in headline inflation was led by moderating food price inflation
in H2-2024-25. Core inflation (which excludes the volatile
food and fuel prices) continued to remain below 4 per cent
for most part of the fiscal year. Going forward, we expect
headline inflation to moderate further to 3.7 per cent in 2025¬
26, with a continued easing in food inflation, assuming a
normal monsoon. The risk to inflation stems from weather-
related disruptions reigniting food inflation.

Tariff threats and related disruptions in global trade flows pose
the biggest risks to global and India's growth prospects. The
US had imposed reciprocal tariffs across all countries with
India attracting a tariff of 26 per cent in early April, 2025. Higher
tariffs were later put on pause for a 90-day period and replaced
with a blanket tariff of 10 per cent on all countries except
China which attracts a 30 per cent tariff for now. The final tariff
imposed will depend on country specific trade agreements
including between India and the US. The diversification and
derisking of supply chains could open an opportunity for India
to expand its exports to the US in sectors like electronics
and textiles amongst others. Moreover, India could benefit
from closer trade ties with the US depending on the final
negotiations under the Bilateral Trade Agreement. That said,
the risk of a sharp global growth slowdown, recession in the
US and supply chain disruptions due to US tariffs and any
retaliation by other countries poses a risk for India's overall
exports in Financial Year 2025-26.

Geopolitical tensions in the Middle East, Russia and Ukraine
or closer home with neighbours could impact domestic
growth. The geopolitical tensions between India and Pakistan
have currently subsided but need to be closely monitored.
Similarly, a further escalation in Ukraine - Russia tensions
could disrupt global trade and energy flows and negatively
impact the domestic economy. Furthermore, financial market
volatility and climate induced uncertainties continue to pose
risks to growth.

Domestically, a slower than expected improvement in
consumption demand due to weather related disruptions,

inflation spikes and any sharp corrections in the domestic
equity market could also weigh on growth prospects.

That said, India's domestic economy remains resilient and
its financial system sound to navigate global headwinds.
Moreover, proactive monetary and fiscal support are likely to
provide further support to growth in Financial Year 2025-26.

I Financial Performance

The financial performance of your Bank during the year ended
March 31, 2025 remained healthy with Total Net Revenue
(Net Interest Income plus Other Income) rising 6.7 per cent
to ' 1,68,302.4 crore from ' 1,57,773.5 crore in the previous
year. Revenue growth was driven by an increase in Net
Interest Income. Net Interest Income grew by 13.0 per cent
to ' 1,22,670.1 crore. Net Interest Margin (NIM) stood 3.48
per cent.

Total Provisions and Contingencies were ' 11,649.4 crore
as compared to ' 23,492.2 crore in the preceding year. The
decrease is mainly on account of floating provision created in
the previous year of ' 10,900.0 crore. Your Bank's provisioning
policies remain more stringent than regulatory requirements.

The Coverage Ratio based on specific provisions alone
excluding write-offs was 67.9 per cent and including general,
floating and contingent provisions was 172.1 per cent. Your
Bank made General Provisions of ' 198.4 crore during the
year. Gross Non-Performing Assets (GNPAs) were at 1.33
per cent of Gross Advances, as against 1.24 per cent in the
previous year. Net NPA ratio stood at 0.43 per cent as against
0.33 per cent in the previous year.

Profit Before Tax grew by 24.8 per cent to ' 88,478.1 crore.
After providing for Income Tax of ' 21,130.7 crore, Net Profit
increased by 10.7 per cent to ' 67,347.4 crore from ' 60,812.3
crore. Return on Average Net Worth was 14.56 per cent while
Basic Earnings Per Share (EPS) was ' 88.29 up from ' 85.83.

Other Income fell by 7.33 per cent to ' 45,632.3 crore.
Excluding prior year transaction gains of ' 7,341.42 crore
from stake sale in subsidiary HDFC Credila Financial Services
Ltd, Other Income grew by 8.91 per cent. The largest
component was Fees and Commissions at ' 31,898.6 crore.
Profit on Revaluation and Sale of Investments was ' 1,754.3
crore. Foreign Exchange and Derivatives Revenue was
' 4,919.04 crore and recoveries from written-off accounts
were ' 3,785.0 crore.

Operating (Non-Interest) Expenses rose to ' 68,174.9 crore
from ' 63,386.0 crore. During the year, your Bank set up
719 new branches and 201 ATMs / Cash Recycler Machines
(CRMs). The addition in expenses includes HDFC Limited
operating cost post-merger. This, along with higher spend
on IT resulted in higher infrastructure and staffing expenses.
Staff expenses also went up due to employee additions and
annual wage revisions. Further, Deposit Insurance and Credit
Guarantee Corporation (DICGC) premium cost increased due
to deposit growth. Despite higher Staff and Infrastructure
Expenses, the Cost to Income Ratio was 40.5 per cent as
compared to 40.2 per cent during the previous year.

As on March 31, 2025, your Bank's Total Balance Sheet
stood at ' 39,10,199 crore, an increase of 8.1 per cent over
' 36,17,623 crore on March 31, 2024. Total Deposits rose by
14.1 per cent to ' 27,14,715 crore from ' 23,79,786 crore.
Savings Account Deposits grew by 5.3 per cent to ' 6,30,467
crore while Current Account Deposits rose by 1.3 per cent to
' 3,14,094 crore. Time Deposits stood at ' 17,70,155 crore,
representing an increase of 20.3 per cent. CASA Deposits
accounted for 34.8 per cent of Total Deposits. Advances stood
at ' 26,19,609 crore representing an increase of 5.4 per cent.
The Domestic Loan Portfolio at ' 25,73,450 crore grew by 5.2
per cent over March 31, 2024.

The Bank's Debt Equity Ratio for the year ended March 31,
2025 stood at 0.74 as compared to 1.21 in the previous year.

HDFC Limited’s Borrowing Maturity Schedule

Of the HDFC Limited's borrowings of ' 2,87,923 crore as at
March 31,2025, approximately 15 per cent is due for repayment
in each of the two years up to FY27 and the balance 70 per
cent is due thereafter.

I Business Review

Your Bank's operations are split into Domestic and International.

A. Domestic Business comprises the following:
Retail Banking

Your Bank's Retail Assets are built on three key
principles: Strong Digital Offering, Optimal Risk Pricing
and Maintaining Pristine Portfolio Quality. Adherence to
these principles combined with the strength of merger
boosted your Bank's Retail Advances to ' 13,75,769
crore witnessing a growth of about 9 per cent year-on-
year.

Brief on segment performance:

The Bank's increased focus on top corporates and
good credit score customers contributed to the overall
pristine portfolio quality. Personal Loans segment has
experienced strong growth with the overall portfolio
touching ' 1,99,334 crore towards the end of the year.
Nearly all applications (99.6 per cent) of this segment are
originated digitally and 87 per cent of these applications
are disbursed digitally.

The Xpress car loans, offering seamless end-to-end
digital disbursement, has increased the digital origination
to 36 per cent of the total New Car Loan business.

Two-Wheeler advances are close to ' 12,359 crore with
nearly 100 per cent digital acquisition.

Your Bank has exhibited significant year-on-year growth
of 28 per cent in Gold Loans capitalising on an expanded
branch network.

Post the merger, your Bank, has emerged as an
institution with one of the largest mortgage loan portfolios
in the country. The retail mortgage advances stood at
' 8,35,656 crore compared to the previous year's
' 7,74,406 crore representing a growth of 8 per cent year
on year.

The payments business is one of the stated strategic
pillars for the Bank.

With over 7.5 crore cards issued (credit, debit and pre¬
paid) and a widely distributed acceptance network
across the online and offline merchant ecosystem, HDFC
Bank continues to maintain a leadership position across
multiple product offerings in the payments landscape.

I n the Financial Year 2024-25, HDFC Bank scaled up
with a slew of new products launched across UPI, TATA,
Swiggy in the Payments Business.

The year ended March 31, 2025 saw 62 lakh new
credit cards being issued covering retail and business
segments. Of total cards in force in market, HDFC Bank
crossed 2.38 crore cards in force which is the highest
amongst all issuers. To provide better service to all card
holders, the recently launched Mycards, emerged as a
robust and comprehensive card servicing platform and
currently has 3.45 crore registered customers availing
several card related services.

Further, the Bank launched PayZapp 2.0 a comprehensive
mobile payment commerce app in March 2023. PayZapp
not only supports a complete range of payments from
credit cards, debit cards, wallet and UPI with customers
getting the choice of form factor to make payments
at merchant stores using Scan or Tap or at Online
merchants with a Swipe action. The app has reached
the milestone of 1.6 crore registrations in FY 2025 and
over 50 lakh (on an average) active users per month.

To enhance and strengthen offerings to merchants,
SmartHub Vyapar- an integrated payment, banking
and business solution that caters to the daily needs of
merchants and helps them drive business growth was
formally launched in October 2022. The platform has
witnessed widespread adoption ever since and has
onboarded close to 19.3 lakh users across the country
as on March 31, 2025.

SmartHub Payment Gateway, a unified payment platform
for online merchants was launched in February 2024 in
line with the Bank's endeavour to provide merchants a
comprehensive platform to cater to their payments and
banking needs and help drive their growth. This platform
enables merchants to collect payments through 150
plus methods and assists them in maximising sales
with best-in-class success rate. SmartHub Payment
Gateway provides an insightful dashboard powered by

smart analytics and empowers merchants to provide a
frictionless check out experience for their customers.
The platform has onboarded over 1,600 Merchants
with projected March exit volume of approximately
1,000 crore.

Lastly, in tune with the evolving payments landscape
the business continues to transform itself with significant
investments across Cloud Computing, Analytics,
Artificial Intelligence and Machine Learning, Open APIs
and Cyber Security. The objective is to manage large
scale and continuously grow volumes while processing
transactions in a safe and secure manner.

Key digital initiatives in the Retail segment in
FY 2024-25:

I n the Financial Year 2024-25, the Bank continued to
expand and deepen its digital footprint across the retail
segment, with a strong emphasis on simplifying customer
journeys, scaling digital fulfilment, and embedding
services across channels and platforms.

Driven by the Bank's broader Shift Right strategy, the
focus this year was on developing end-to-end journeys
that minimise friction, reduce paperwork and enhance
speed-to-fulfilment—while ensuring security, regulatory
alignment and accessibility.

Digital Origination and Fulfilment at Scale

Retail customer acquisition through digital channels
reached new milestones during the year. 86 per cent
of all new retail products—including savings accounts,
loans, credit cards and deposits—were sourced digitally,
up from 82 per cent in the previous year. The bank now
enables 97 per cent of all financial transactions through
digital channels, highlighting the shift towards a self¬
service ecosystem. Additionally, 79 per cent of servicing
requests were fulfilled digitally, compared to 73 per
cent in FY 2024. The Bank's self-service and assisted
journeys now support onboarding across a diverse
customer base, from digitally native users to first-time
users in semi-urban and rural markets.

The Bank's Xpress Car Loan (XCL) platform continued
to scale as India's largest end-to-end digital auto loan
journey. The platform processed over 1.3 lakh units,
disbursing ' 13,110 crore digitally in FY 2025. This zero-
paper, zero-touch model is now the preferred channel

for auto loans and extends full-service capabilities even
to new-to-bank customers.

Other digitally enabled loan products—such as personal
loans, gold loans and business loans—saw increased
adoption, supported by features like:

•    Pre-qualified offer journeys

•    Bank statement analytics

•    Automated underwriting

•    Real-time KYC and biometric authentication

Digital journeys were also introduced for Group
Health and Group Term insurance, embedded within
account and loan offerings for existing-to-bank (ETB)
customers—reflecting a growing focus on integrated
protection products.

Expanded Digital Journeys Across Liabilities
and Cards

In deposits and liabilities, the Bank launched new
journeys for:

•    Assisted and unassisted savings account onboarding

•    Minor-to-major conversions and salary
family accounts

•    Fixed deposits with external funding

•    Standalone card and asset customer servicing

Digital issuance and activation journeys for credit cards,
including DSA-assisted and corporate card variants,
were expanded during the year. These journeys were
integrated with real-time bureau checks and document
validations, reducing manual touchpoints and enabling
faster disbursals.

Enhanced Customer Service and Post-Sale
Fulfilment

Customer servicing continued to see strong digital
adoption. The Bank now offers 89 per cent digital
coverage across common retail service interactions—up
from 73 per cent in FY 2024.

Key services journeys rolled out during the year included:

•    Address update (cards and assets)

•    Re-KYC for standalone asset customers

•    SmartHub and WhatsApp-based service ticketing

Over 55 per cent of support interactions were resolved
through self-service channels, powered by intelligent
routing, contextual nudges and fallback to live assistance
where required.

Embedded Retail Journeys and Ecosystem
Integration

Retail journeys were also extended beyond the Bank's
direct platforms through embedded finance partnerships
with e-commerce, fintech and mobility platforms.
Strategic tie-ups with platforms like Tata Neu, Swiggy
and PhonePe enabled real-time, near 100 per cent
digital fulfilment of savings accounts, personal loans and
credit cards.

Behind the scenes, these embedded journeys were
powered by the Bank's growing library of secure,
reusable APIs and an orchestration framework that
enabled straight-through processing (STP), verification,
and activation at the point of need.

Inclusive and Assisted Digital Journeys

The Bank continued to prioritise accessibility through
assisted digital journeys, especially in semi-urban and
rural markets. These journeys leverage field agents,
business correspondents and biometric-ready apps to
support onboarding and fulfilment.

Key features included:

•    Aadhaar and biometric-based KYC

•    Geo-tagged documentation

•    Offline-ready functionality for low-connectivity areas

Products such as gold loans, microcredit, and deposits
were offered through assisted apps, ensuring financial
inclusion while maintaining the speed and simplicity of
digital fulfilment.

Our Distribution Channel:

The virtual channels of the Bank were set up to enhance
coverage across customer segments and to ensure a
holistic service experience to all customers. This is one
of the key engagement channels in the Bank.

Virtual Relationship Banking is an integrated customer
centric approach covering three pillars - Virtual
Relationship, Virtual Sales and Virtual Care serving as
a crucial component of the Bank's sales and customer
engagement strategy. This approach harnesses

technology to connect with customers, build relationships
and promote banking products and services. This helps
the Bank to expand the managed customer base,
generate leads and drive revenue growth.

Recognising employees and customers as the
capitals for this business, your Bank has invested
heavily in training and development of its relationship
managers. Training covers product knowledge, sales
techniques, communication skills, compliance and
regulatory requirements and customer relationship
management skills.

As we transition into the digital age, a banking experience
characterised by digital ease and personalised
conversations remains at the core of our Virtual
Relationship Management (VRM) strategy.

As a part of this strategy, relationship managers reach
out to customers through remote and digital platforms
resulting in deeper and cost-effective engagement. As
digital literacy and exposure increases exponentially,
VRMs are gaining wider acceptance through deeper
engagement and relationships backed by a strong
product offering thereby constituting an important
component of the Bank's customer engagement strategy.

With proper training, technology support, and adherence
to compliance, this channel is a highly effective tool for
the Bank to drive revenue growth, expand its customer
base and provide excellent customer service.

Retail Banking - Mortgage Business

Post the merger, HDFC Bank, has emerged as an
institution with one of the largest mortgage loan portfolios
in the country. This brings together HDFC Limited's
segment expertise of over four and a half decades and
in person customer connect with HDFC Bank's extensive
branch network and an ability to leverage technology
platforms. The home loan business has opened a
fresh pathway for future growth for the Bank due to a
large customer base. This increases its ability to serve
customers better due to a longer tenure engagement and
enhances its ability to tap into opportunities for cross¬
sell. The retail mortgage advances stood at ' 8,35,656
crore compared to ' 7,74,406 crore in FY 2024.

Cross-sell remains a primary focus for both existing and
new customers. The Bank leverages its digital channels
to minimise acquisition costs. Post the merger, over 95
per cent of the newly acquired home loan customers
hold a liability account with the Bank. The home loan

customers also enjoy the benefit of a strong suite of
financial products and solutions that the Bank offers, like
credit cards, consumer durable loans, wealth products
and insurance. This culminates in strengthening customer
relationships and enables HDFC Bank to emerge as the
primary banker for these customers.

Third Party Products

Your Bank distributes Life, General and Health Insurance
as well as Mutual Funds (Third Party Products) to its
customers. In the Financial Year 2024-25, the income
from this business accounted for 24.7 per cent of the
Bank's Total Fee Income.

Life Insurance

Your Bank has adopted an open architecture model
for distributing insurance products from three trusted
partners with a focus on offering customers a diverse
array of options. For the year ended March 31, 2025, the
Bank mobilised premium of ' 10,331 crore representing
a year-on-year growth of 16 per cent. HDFC Bank's
extensive distribution network includes branches, virtual
channels, NRI services and wealth management. The
key focus would continue to be on staff training, robust
quality and control processes uniformly implemented
across all partners as well as offering integrated and
seamless digital on-boarding journeys. Currently, the
Bank's NetBanking platform offers 66 insurance products
across all partners accounting for over 49 per cent of the
total policies.

Premium Earned

Non-Life Insurance

Your Bank, in collaboration with its four General Insurance
and two Standalone Health and Insurance partners, has
introduced innovative non-life insurance products to
expand the range of offerings and provide comprehensive
coverage to customers. These products are accessible
through both digital and physical platforms. Employees
across channels have been trained in the new products

and processes. To meet customer demands, additional
manpower has been deployed across non-life insurers.
As on March 31, 2025, premium mobilisation in General
and Health Insurance reached a total of ' 4,381.6 crore
representing a growth of 4 per cent over the previous year.

Premium Earned

Mutual Funds

Your Bank follows an open architecture approach in
distribution of Mutual Funds and is currently associated
with 37 Asset Management Companies (AMCs).

The Bank's Assets Under Management (AUM) grew by
14 per cent to reach ' 1,56,321 crore for the year ended
March 31, 2025. The Bank offers digital on-boarding
platform to customers for Mutual Fund investments
through Investment Services Account (ISA) and
SmartWealth (app based).

During the same period, HDFC Bank and HSL
(InvestNow) witnessed a significant growth of 40 per cent
in Systematic Investment Plans (SIPs) mobilisation.

Assets Under Management (AUM)

Wealth Management

I n the Financial Year 2024-25, our team of over 1000
Sales and Service experts have focused on extending
Wealth services to clients ranging from Ultra-HNW to
Mass Affluent client segments.

HDFC Bank was adjudged as “India's Best for HNW”
in the Euromoney Private Banking Awards 2025. In
the Global Private Banking Awards 2024 organised by
Professional Wealth Management (PWM), published by
the Financial Times, HDFC Bank was adjudged the Best
Private Bank in India.

Your Bank made continuous and incremental efforts to
generate as well as quantify the alpha delivered in each
client's portfolio. In 2025, 87 per cent of our clients had
generated a positive alpha with the median client alpha
at 2.6 per cent. Our aim is to incorporate alpha in all client
reports and portfolio reviews.

With a sales force of over 850 team members supported
by 150+ service staff and over 100 Investment Analysts,
we have the largest Wealth bankers in the country. With
an increase in manpower, we've put in consistent efforts
in providing the best education and training to our private
bankers. By conducting intensive training sessions in
collaboration with top-ranked business schools such
as Indian Institute of Management at Ahmedabad and
Bangalore, we have groomed our in-house talent.

Service First culture is the central pillar for our business
as we focus on service led sales by prioritising client
delight and relationship banking. Service Quality is an
essential part of RM scorecards and Supervisor KPIs.
Client engagement, portfolio servicing and Net Promoter
Score are key business performance assessment
measures. Our Service First Culture has led to an NPS
score of 87 in the Financial Year 2024-25 which is one of
the highest in the industry.

With this segment specific focus, we have been
consistent in growing our market share and proving to be
one of the largest Wealth Managers in the country. With
the help of over 100 Investor Education Initiatives having
fund managers as expert guest speakers, your Bank has
been able to reach across the length and breath of the
country, covering Tier II and III cities as well.

Your Bank has endeavoured to become the market
leader across all investor segments through curated

offerings in each segment. For Ultra-HNW clients, we
have more than doubled the number of products referred
on our platform. Keeping our Super-Affluent clients in
mind, we've introduced State-of-the-art Wealthfy reports
that provide detailed portfolio diagnostics and analysis.

We have developed an advanced unassisted digital
investment platform - SmartWealth that enables our clients
to track their portfolios and make investments along with
access to goal-based investment recommendations.
With highly intuitive client experience and gamification of
client journeys, this mobile first platform aims to provide
access of our research to all mass affluent clients. It has
more than six lakh downloads and nearly four lakh clients
onboarded on SmartWealth.

HDFC Bank's wide range of investment offerings
successfully adapt to the changing economic landscape
to manage and create wealth for our clients, with “Protect,
Manage, Grow.” being our brand identity.

Wholesale Banking

The Wholesale Banking business focuses on institutional
customers such as the Government, PSUs, Large and
Emerging Corporates and SMEs. Your Bank offers a
range of products and services encompassing working
capital and term loans, trade credit, cash management,
supply chain financing, foreign exchange and investment
banking services.

Wholesale Banking business constituted about 42 per
cent of your Bank's Gross domestic advances as per
Basel II classification, with a book size of ' 10,82,413 crore.

The Bank has continued making significant inroads into
the banking consortia of a number of leading corporates.
Corporate Banking, focusing on large, well-rated
companies continued to be the biggest contributor to
Wholesale Banking in terms of asset size.

This business continued its attention towards engaging
with Multi-National Corporations (MNCs) and capitalised
on the increasing trend among large companies to
consolidate their banking relationships. Your Bank
strengthened its existing relationships and expanded its
market share by leveraging its extensive array of product
offerings. The Emerging Corporates Group focuses on
the mid- market segment. Your Bank leveraged its vast
geographical reach, technology backbone, automated
processes, suite of financial products and quick

turnaround times to offer a differentiated service. The
business continues to have a diversified portfolio in terms
of both industry and geography.

I n the year under review, the Bank continued its focus
on the MSME sector. There has already been increased
formalistion and digitalisation of the MSME sector owing
to the implementation of the Goods and Service Tax
(GST). Through MyBusiness, which offers comprehensive
financial solutions like Business Banking, Easy Loans,
Trade Services and Digital Solutions, MSMEs can
conveniently access a suite of product / services tailored
to meet the business requirements.

Post the merger of HDFC Limited with HDFC Bank, the
Bank inherited the realty finance business. During the
year, the bank increased its focus to provide construction
finance in the residential and commercial space as well
as lease rental discounting to leading developers in the
country. The Bank increased its market share in existing
relationships and added new customers. it plans to
increase its geographical presence in the coming year to
cater to new customers in key growing markets. The Bank
focuses on providing a gamut of banking services and
customised solutions to its customers in this segment.

The Investment Banking business further cemented its
prominent position in the Debt Capital Markets, Equity
Capital Markets and INR Loan Syndication. Your Bank is
among the top three in the Bloomberg rankings of Rupee
Bond Book Runners for the Financial Year 2024-25 with a
market share of 11.61 per cent. Your Bank is amongst the
top five in the Bloomberg rankings of Syndicated INR term
loans for Financial Year 2024-25. The Bank has provided
advisory services and actively assisted clients in equity
fund raising through five Initial Public Offerings (IPOs)
amounting to ' 17,250 crore (including one InvIT IPO) and
one Institutional Placement of units of InvIT amounting to
' 8,400 crore, aggregating to about ' 25,650 crore for
the Financial Year 2024-25. Additionally, the Bank also
assisted in a government. disinvestment through an Offer
for Sale amounting to about ' 3,450 crore.

I n the Government Business, your Bank sustained its
focus on tax collections, collecting direct tax (CBDT) of
' 6,08,278.22 crore and Indirect tax - CBIC (Custom duty
+ GST) of over ' 5,15,558.20 crore during Financial Year
2024-25. It continues to enjoy a pre-eminent position
among the country's major stock and commodity
exchanges in both Cash Management Services and
Cash Settlement Services.

Your Bank has embarked on strategic digital
transformation to enhance Customer Engagement and
Employee Experience and create an ecosystem for
seamless banking.

It also leverages analytics to delve deeper into corporate
ecosystems resulting in better product structuring, cross
sell opportunities, improved yields thus improving the
Bank's share of Revenue Pools from Corporates.

HDFC Bank provides a comprehensive suite of cutting-
edge platforms tailored to meet the diverse needs of
corporate clients. Among these, our Corporate E-Net
Banking platform stands out, offering both the reliable
e-Net service and the more recently upgraded CBX
platform. These platforms provide intuitive interfaces
and robust functionalities empowering businesses
with seamless control over their financial operations.
Additionally, our Trade Platform - Trade on Net (TON)
serves as a cornerstone for facilitating efficient trade
transactions. Also, our Supply Chain Finance (SCF)
transaction platform enables digital contract bookings
and automated disbursements, streamlining end-to-
end SCF transactions for the corporates. Your Bank
has integrated with all the three TReDS platforms.
We are also collaborating with Fintechs to integrate
with Corporate ERP and offer Embedded Banking in
Corporate Ecosystems journeys.

Treasury

The Treasury Department is the custodian of your
Bank's cash / liquid assets and handles its investments
in securities, foreign exchange and cash instruments.
It manages the liquidity and interest rate risks on the
balance sheet and is also responsible for meeting
reserve requirements. The vertical also helps manage
the hedging needs of customers and earns a fee income
generated from transactions customers undertake with
your Bank while managing their foreign exchange and
interest rate risks.

Revenue accrues from spreads on customer transactions
based on trade and remittance flows and demonstrated
hedging needs. Your Bank recorded a revenue of
' 4,919.04 crore from foreign exchange and derivative
transactions in the year under review.

As a part of its prudent risk management, your Bank
enters into foreign exchange and derivatives deals with
counterparties after it has set up appropriate credit limits
based on its evaluation of the ability of the counterparty

to meet its obligations. Where your Bank enters into
foreign currency derivatives contracts not involving the
Indian Rupee with its customers, it typically lays them off
in the inter-bank market on a matched basis. For such
foreign currency derivatives, your Bank primarily carries
the counterparty credit risk (where the customer has
crystallised payables or ‘mark-to-market' losses) and
may carry only residual market risk, if any. Your Bank
also deals in derivatives on its own account including for
the purpose of its own balance sheet risk management.

HDFC Bank is also a nominated agent for the
bullion imports and has a significant market share in
that business.

Your Bank maintains a portfolio of Government securities
in line with the regulatory norms governing the Statutory
Liquidity Ratio (SLR). A significant portion of these SLR
securities are in ‘Held-to-Maturity' (HTM) category, while
some are ‘Available for Sale' (AFS). The Bank is also a
primary dealer for Government Securities. As a part of
this business, your Bank holds fixed income securities
as ‘Held for Trading' (HFT).

I n the year under review, your Bank continued to be a
significant participant in the domestic exchange and
interest rate markets. It also capitalised on falling bond
yields to book profits and is now looking at tapping
opportunities arising out of the liberalisation in the foreign
exchange and interest rate markets.

B. International Business

During the year, your Bank stayed on course to cater
to NRI clients and deepen its product and service
proposition. HDFC Bank's international operations
comprise five branches, located in Hong Kong, Bahrain,
Dubai International Financial Centre (DIFC), Singapore
and an IFSC Banking Unit in Gujarat International Finance
Tec-City. Additionally, it has four representative offices
in Kenya, Abu Dhabi, Dubai and London respectively,
catering to Non-Resident Indians and Persons of
Indian Origin.

The Bank's product strategy in International Markets is
customer centric and it has products to cater to client
needs across asset classes. GIFT City branch offers
products such as trade credits and foreign currency
term loans (including external commercial borrowings).
It is gradually widening the product offerings to cater
to the needs of Resident and Non-Resident clients and
capitalise on the growth in the financial centre.

As on March 31, 2025, the Balance Sheet size of
International Business was US $ 10.83 billion. Advances
constituted 1.75 per cent of the Bank's advances.
The Total Income contributed by Overseas Branches
constituted 1.44 per cent of the Bank's Total Income for
the year.

C. Partnering with Government, Institutions and
Start-Ups

It has been another year of steady progress for
Government, Institutional Business and Start-Ups
within your Bank. Some of the key highlights and new
initiatives include:

1.    Increased focus on the retail Government deposits
resulted in your Bank acquiring over 10 per cent of
the market share in 201 districts.

2.    Your Bank continues to rank among the top three
leading Government Agency Banks for collecting
Central Government taxes. Substantial market
shares were acquired in collections of Direct Tax,
GST and Custom Duty as per tax collection data
reported through PIB & CGA, Government of India.
Your Bank has now started sourcing accounts
under the Senior Citizens Savings Scheme on
behalf of the Central Government.

HDFC Bank’s Market Share:

3. Your Bank facilitated the transfer of funds flowing
from the Central Government to various beneficiaries
under the aegis of the Centrally Sponsored
Schemes, Central Sector Schemes, and the 15^th
Finance Commission. The total flows processed
grew by 11 per cent year on year.

4.    Your Bank continues its initiatives on digitalisation
of financial operations of government entities.
For example, it has enabled online collection of
revenues from wayside amenities for National
Highway Logistics Management Limited.

5.    On disbursements, your Bank has helped digitalise
payments to beneficiaries against land acquisition
activities undertaken by various authorities for
development of national infrastructure.

6.    Your Bank is now integrated with National
e-Governance Services Limited (NeSL) enabling
online access and validation of electronic Bank
Guarantees (eBGs) to serve customers better.

7.    Your Bank is now integrated with treasury
systems across six states to enable beneficiary
account validation, payments, transaction and
balance reporting.

8.    Your Bank has successfully harnessed the granular
business opportunity at District-level, Block-level
and Gram Panchayat-level. It has introduced a new
bundled offering called “Panchayat Kavach” where
complimentary non-life insurance of ' 5 lakh and
several exclusive benefits are provided to secure
the Gram Panchayats from various calamities.

9.    Your Bank has also driven digitalisation at district
level through solutions that enable expenditure
reporting and associated payments through
integration with the Bank's payment channels.

10.    Your Bank has intensified its efforts to engage with
pensioners implementing the following measures:

a.    Enhancing pension product for defence
pensioners, with personal accidental death
coverage of ' 50 lakh till the age of 80.

b.    In the Financial Year 2024-25, we ensured that
99 per cent of pensioners (our customers)
successfully submitted their digital life
certificates in the Pension Processing System
of the Bank through a hassle-free experience.

c.    Further, your Bank has extended its pension
disbursement services to non-HDFC
Bank accounts thus servicing a wider
pensioner population.

11.    Your Bank continues to expand its presence in
the education sector and has successfully on-
boarded approximately 42 per cent of universities
nationwide. Some of the marquee additions during
the year include IIM Kozhikode, IIM Visakhapatnam,
AIIMS Jammu, Mahadevappa Rampure (MR)
Medical College, Shekhawati University and
Central Sanskrit University. Additionally, your Bank
onboarded notable religious organisations, including
Dwarkadhishji Mandir, Thakur Shri Bankey Bihari
Ji Maharaj Vrindavan, Shri Digamber Jain Atishay
Teerth Kshetra Chandragiri Dongargarh, Sri Rajapur
Jagannath Mandir, Catholic diocese of Kottayam,
Shri Bhimakali Temple, Haryana Wakf Board and
the chain of ISKCON temples.

12.    Your Bank has received positive customer feedback
for its recent digital products and solutions:

a.    FarSight Dashboard: Building on the
existing solution, your Bank has further
enhanced the FARSight Dashboard to provide
visibility across accounts and offer cashflow
forecasting capabilities for customers to plan
their finances.

b.    GIGA: Your bank launched GIGA - an industry
first banking programme tailored specifically
for gig/platform workers. GIGA addresses an
underserved demographic, by understanding
the unique challenges faced by them such as
irregular income, lack of financial security and
limited access to traditional banking services.

GIGA Program includes a specialised savings
account with relaxed quarterly balance requirements,
debit and credit cards with value added offers,
affordable health insurance for themselves and their
family, unique flexible investment products which
enables them to ‘invest when they can and how
much they can' instead of a traditional systematic
investment plan. Additionally, a range of loans to
meet their borrowing needs are also offered.

13.    Your Bank is committed to enabling smooth
cross-border transactions for Indian merchants,
freelancers, MSMEs and exporters. In line with
RBI's regulations on online payment gateway
service providers/ payment aggregators - cross
border, your Bank is collaborating with fintech
partners for providing authorised dealer services
to enable secure and hassle free cross-border
trade settlements.

14.    Start-up Banking: Your Bank provides a
comprehensive range of banking products specially
curated for the start-up ecosystem. In furtherance
of its objective to support the banking and financial
needs of start-ups, your Bank signed MoUs with
prominent start-up ecosystem partners. Most
of them are government nodal agencies and
incubators located at educational institutions. Some
of the partners are:

a.    Department for Promotion of Industry and
Internal Trade (DPIIT), Government of India

b.    Society for Innovation and Entrepreneurship
(SINE), IIT Bombay

c.    Kerala Startup Mission (KSUM)

d.    Startup Odisha

e.    Startup Assam

f.    Hyderabad University

g.    Manipal University, Jaipur-Technological
Incubation Centre

h.    Chitkara University

15.    HDFC Tech Innovators 2024: Your Bank along
with HDFC Capital Advisors spearheaded HDFC
Tech Innovators 2024, a joint initiative of HDFC
Bank group companies - HDFC AMC, HDFC Ergo,
HDB Financial Services, HDFC Life, and HDFC
Securities to promote innovations and opportunities
for technology related start-up ventures. Over 2,000
applications were received across five categories -
Fintech, Proptech, Sustainability Tech, Consumer
Tech and New Age Tech. The top 10 winners
were selected by a grand jury comprising HDFC
Bank Group leadership, venture capitalists, senior
industry executives and unicorn founders.

16.    Parivartan Start-Up grants: Your Bank
supported 20 incubators associated with reputed
academic institutions and 87 start-ups through the
eighth edition of the Parivartan Start-Up Grants.
This year, your Bank partnered with three nodal
government agencies, each contributing to specific
thematic areas:

a.    Reserve Bank Innovation Hub: Identifying/
developing a product/process/policy to make
banking inclusive for women

b.    Startup India: Strategic partnership for
access to startup ecosystem

c.    MeitY India AI Mission: Strategic partnership
towards nurturing AI solutions for large scale
socio-economic impact.

d. Semi-Urban and Rural

Your Bank has traditionally focused on the Semi-Urban
and Rural (SURU) markets. As rural incomes and
aspirations rise, your Bank's focus on this market has
only increased as it caters to the demand for better
quality financial products and services. The Bank has
been increasing its presence in Semi-Urban and Rural
markets through various groups in the Bank with the
objective of increasing lending.

Apart from meeting its statutory obligations under PSL
(Agri and Allied activities, Small and Marginal Farmers and
Weaker Sections), your Bank has been offering a wide
range of products on the asset side, such as Auto, Two¬
Wheeler, Personal, Gold, Light Commercial Vehicle (LCV)
and Small Shopkeeper Loans in these markets. Having
expanded the rural footprint to more than 2.35 lakh
villages, HDFC Bank now plans to increase its coverage
in existing villages and deepen the relationships. The
Semi-Urban and Rural push has been backed by the
Bank's digital strategy. Your Bank's operations in Semi¬
Urban and Rural locations are explained below:

Agriculture and Allied Activities

Your Bank's assets in Agriculture and Allied activities
(PSL + Non PSL) stood at ' 3,73,863.65 crore as on
March 31, 2025.

The Key to HDFC Bank's success in the existing market has
been its ability to leverage various opportunities through:

1. A diverse product range

2.    Faster turnaround time

3.    Distribution strength

4.    Innovative digital solutions

HDFC Bank's extensive product portfolio encompasses
pre and post-harvest Crop Loans, Farm Development
/ Investment Loans, Two-Wheeler Loans, Auto Loans,
Tractor Loans, Small Agri Business Loans, Loan Against
Gold, Loan to landless labourers and more. This
comprehensive offering has enabled the Bank to establish
a robust presence in rural areas with its asset products.
Additionally, it has been a prominent participant in the
Agri Infrastructure Fund Scheme consistently achieving
allocated targets set by the Government.

HDFC Bank is increasingly involved in facilitating various
Government / Regulatory Schemes to other Non-crop
Segments, including Agri-allied and Small Agri-Business
Enterprises, as well as Rural MSMEs. A unique business
model encompassing a wide variety of products and
services driven by a relationship management approach
ensures suitable solutions as well as financial literacy
to farmers. The Bank has tailored a range of crop and
geography-specific products to align with harvest cycles
and address the specific needs of farmers across diverse
Agro-climatic zones. This customer-centric approach
has transformed the rural banking services, enabling the
delivery of personalised offerings to meet the evolving
needs of rural customers effectively.

Products such as post-harvest cash credit and
warehouse receipt financing facilitate faster cash flows to
farmers, while credit is also extended for Allied Agricultural
Activities such as Dairy, Pisciculture, and Sericulture.
Moreover, HDFC Bank's targeted branch expansion in
SURU regions coupled with digital interventions aims to
create a superior customer experience and position it as
a future-ready institution.

Participation in Government Schemes

As a part of Atmanirbhar Bharat Abhiyan, the Government
of India has announced several schemes/enablers across
several sectors, particularly in the Agriculture sector. Your
Bank is implementing almost all such initiatives / schemes
targeting multiple stakeholders in the Agri ecosystem.

Agriculture Infrastructure Fund (AIF) Scheme:

Through this scheme, the Bank is offering medium to
long-term debt for investment in viable projects pertaining
to post-harvest management and infrastructure
development like construction of warehouses/silos. As
of March 31,2025, under the AIF scheme, your Bank has
sanctioned ' 6,359 crore covering 8,859 projects and
disbursed ' 4,642 crore covering 7,494 projects. During
the year under review, your Bank has sanctioned ' 1,991

crore for 3,529 projects and disbursed ' 1,843 crore for
3,363 projects.

•    The Project Monitoring Unit, AIF, Ministry of
Agriculture and Farmer Welfare has set specific
targets through various campaigns. Your Bank
achieved 106 per cent of assigned target by
approving ' 688 crore against target of ' 650 crore
in AIF PRAGATI Campaign conducted between
January 1 and February 15, 2025.

•    In the ARISE Campaign conducted between
June 18 and July 31, 2024, your Bank has secured
second position amongst all Scheduled Commercial
Banks (SCBs) by approving 1,421 applications.

Pradhan Mantri Formalisation of Food and
Micro Enterprises (PMFME):

Your Bank is actively implementing the scheme and
passing the benefits to all eligible borrowers in the food
processing sector.

I n the year under review, loans worth ' 549 crore were
sanctioned for 2,929 projects and ' 567 crore has been
disbursed for 3,319 projects.

Other Agri schemes, where your Bank has significantly
contributed include Agri Marketing Infrastructure Fund
(AMIF), Animal Husbandry Infrastructure Fund (AHIDF),
Credit Guarantee Fund for Micro Units, National
Livestock Mission (NLM) as well as state-specific
Government schemes.

To address high volume and low-value ticket loans in
Agri-Business with a digital optimisation strategy, your
Bank plans to onboard AgriTech-BCs with differentiated
business models. These BCs will help source and service
small and marginal farmers.

Funding Small and Marginal Farmers (SMFs):

Your Bank views lending to the agriculture sector,
including to small and marginal farmers, as a huge
opportunity and not just a regulatory mandate to meet
priority sector lending requirements. The Bank has
leveraged its extensive knowledge of rural customers
to create as well as deliver products and services at
affordable price points with a quick turnaround time. This
has enabled HDFC Bank to establish a strong footprint
in the rural geographies which it has now leveraged to
increase its penetration of liability products.

I n the Financial Year 2023-24, your Bank serviced
customers in about 2.25 lakh villages. Through a plethora
of interventions, the number of villages grew to over 2.35
lakh in the Financial Year 2024-25. Your Bank has put in
place a strategy to further penetrate these villages and
add more customers through a variety of products for
farmer financing.

HDFC Bank has financed and supported 35 lakh Small
and Marginal Farmers. This was achieved through a
strategy to engage closely with small and marginal farmers
through customised agriculture loans. Leveraging the
government schemes it has launched various secured/
unsecured loan products including Loan Against Gold as
security, targeting small and marginal farmers in Agri and
Allied segments.

Farmer Producer Organisations (FPOs):

For agriculture productivity and incomes to grow,
aggregation of farm holdings in the form of FPOs is the
key strategy to double farmers' income. Leveraging the
government scheme for formation and promotion of
10,000 new FPOs (Credit guarantee is available from
NABARD / CGTMSE), your Bank has funded eligible
FPOs for working capital and term loan requirements. As
of March 31,2025, your Bank was able to reach 249 FPOs
covering about one lakh small and marginal farmers.

Digital Interventions

Some of the digital interventions made by your
bank include:

Digitalising Milk Procurement:

This initiative brings transparency in the milk procurement
and payment process which benefits both farmers and
dairy societies. Multi-function Terminals (MFTs), popularly
known as Milk-to-Money ATMs, are deployed in dairy
societies. The MFTs link the milk procurement system of
the dairy society to the farmer's account to enable faster
payments. MFTs have cash dispensers that function
as standard ATMs. Payments are credited without the
hassles of cash distribution. Further, this process creates
a credit history which can then be used for accessing
bank credit. So far, the Bank has digitalised payments
at various milk cooperatives across two states also
279 milk cooperatives actively serving and benefiting
more than 1.66 lakh dairy farmers and facilitated 41.72
lakhs transactions. Apart from dairy and cattle loans,
customers gain access to the Bank's products including
digital offerings such as 10 Second Personal Loan, Kisan

Credit Card and Bill Pay

Gold Loans:

Your Bank is making inroads into a market dominated
by the unorganised sector, moneylenders and pawn
brokers. The Bank is keen on making the gold loan
facility available across the length and breadth of the
country. As on March 31, 2025, the Bank is offering gold
loans through 4,617 branches, with 46 per cent of these
branches in Semi-Urban and Rural location. HDFC Bank
ended the year with a Gold Loan Portfolio of ' 18,716
crore with growth of 28 per cent over the previous year.

Your Bank is implementing its blueprint of making gold
loans available in most of its branches and thereby taking
this product within the reach of otherwise untapped
customer segments

Social Initiatives in Farm Sector

The farm sector faces threats arising out of climate
change as evident from the growing number of extreme
weather events. In addition, factors like soil health, input
quality (seeds and fertilisers), water availability and
Government policy have significant impact, along with
price realisations and storage facilities. All this has an
impact on farm yield and income.

Given the vulnerabilities, it is critical to strengthen climate
resilience and adaptability of the agri-food sector. In this
context, your Bank has launched a variety of initiatives
such as Holistic Rural Development Programme
(HRDP), Crop Residue Management Project amongst
others. Within regulatory guidelines, your Bank has also
been providing relief to impacted farmers. It also has
put in place systems designed to enable Direct Benefit
Transfers in a time-bound manner.

Lending to the agriculture sector, including to small
and marginal farmers, is a regulatory mandate as part
of priority sector lending requirements. The Bank has
leveraged its extensive knowledge of rural customers
to create as well as deliver products and services at
affordable price points and with a quick turnaround
time. This has enabled it to establish a strong footprint
in the rural geographies which has now been leveraged
to increase penetration of liability products. Further,
your Bank has been working with a segment-specific
approach like funding to horticulture clusters, supply
chain finance, agri business, MSMEs and dairy farmers. It
also continues to engage closely with farmers to mitigate
risks and protect portfolio quality.

Micro, Small and Medium Enterprises (MSME)

The MSME sector serves as an important engine for
economic growth and is one of the largest employers in
the economy.

As on March 31,2025, your Bank's assets in the MSME
segment stood at ' 5,24,101.10 crore.

The Micro Enterprises assets alone stood at
' 1,54,028.51 crore.

The Union Government and the Reserve Bank of India
(RBI) have been providing support for lending to MSME
segment on an ongoing basis. Apart from various
schemes to support MSMEs during the pandemic, the
Government has also launched a revamped CGTMSE
scheme with an increased limit threshold for guarantee
cover and reduction of guarantee fee. Many other
schemes like Credit Guarantee to Start Ups (CGSS),
eNWR guarantee scheme have been rolled out.

Your bank emerged as one of the leading contributors to
CGTMSE in the Financial Year 2024-25 also, supporting
the MSME sector with guarantee-covered credit facilities.
This has further supported the growth of MSME loans
which have shown a year-on-year growth of 4.07 per cent.

The pace of digitalisation among MSMEs has accelerated,
which has helped to speed up the pace of disbursement
and increase transparency in the sector. Customers can
now apply online and submit required documents digitally
and they can also execute post-sanction agreements
digitally to avail of facilities quickly with straight-through
disbursement. The Government's digitalisation push,
the adoption of GST and reforms in return filings, such
as income tax have made it easier to access customer
cash flow and financial data, which can be used to
support decision making and portfolio monitoring. Your
Bank's SME portal continues to offer ad hoc approvals
and pre-approved Temporary Overdrafts (TODs) on a
simplified and faster basis to existing customers. They
can request a top-up of loans and submit the required
documents online. The SME portal also allows customers
to access your Bank's services related to sanctioned
credit facilities 24/7 from anywhere. Customers can
download various certificates and statements as needed
on an ongoing basis.

On the trade side, your Bank focuses on customer
engagement to increase the penetration of Trade on Net
applications. Trade on Net is a complete enterprise trade
solution for customers engaged in domestic and foreign

trade. It enables them to initiate and track requests online
seamlessly, reducing time and costs.

Financial Inclusion and Financial Literacy to
educate and empower the under-banked

The philosophy of financial inclusion is about seamless
delivery of financial services. This includes opening of
savings bank accounts to inculcate the savings habit/
transactions, extending credit for productive, personal
and other purposes and offering value added services
such as micro-insurance, pension products among
others. The Bank, through its wide network of branches
and business correspondents coupled with enhanced
digital offerings such as BHIM UPI as well as Aadhaar and
RuPay-enabled Micro-ATMs ensures a wide coverage
pan-India.

HDFC Bank is committed to extending banking services
to deeper geographies in the country to educate,
empower and enable citizens to be a part of the formal
financial system. The bank believes that financial literacy
is an important tool for promoting financial inclusion and
has adopted an integrated approach, wherein its efforts
towards Financial Inclusion and Financial Literacy go
hand in hand.

Through Financial literacy and education, the Bank
disseminates information on the general banking
concepts to diverse target groups, including students,
women, rural and urban poor, pensioners and senior
citizens to enable them to make informed financial
decisions as well as to make people understand the
benefits of linking with the banking system.

Your Bank has been actively committed to offering a
multitude of Government schemes across diverse
geographies. Below are key highlights:

•    Pradhan Mantri Jan Dhan Yojana and Social
Security Schemes (PMJJBY, PMSBY and
APY): To enhance financial inclusion coverage.

Support: Opened more than 50 lakh PMJDY
accounts and enrolled 90.97 lakh customers in
Social Security Schemes (PMJJBY, PMSBY and
APY) since inception.

•    Financial Literacy Camps (FLCs): To educate
and empower citizens to understand the benefits
of joining the formal financial system.

Support: The Bank has cumulatively covered
over 1.84 crore customers through its FLCs.
During the Financial Year 2024-25, the bank has
conducted 4.97 lakh FLC camps covering 30.65
lakh participants.

•    Pradhan Mantri Mudra Yojana (PMMY): To

enable small borrowers to borrow upto ' 20 lakh
for non-farm income generating activities.

Support: Since the launch of the scheme, the Bank
has extended loans amounting to ' 88,664 crore to
1.32 crore beneficiaries.

•    Stand Up India (SUPI): To empower Scheduled
Caste, Scheduled Tribe and Women borrowers.

Support: Your Bank has extended loans amounting
to ' 3,720 crore to 16,115 beneficiaries since
inception of the scheme.

•    Prime Minister’s Employment Generation
Programme (PMEGP): A special scheme aimed
at generating employment opportunities in rural
and urban areas through establishment of new
self-employment ventures, projects and micro¬
enterprises.

Support: The Bank has disbursed funding of ' 390
crore since inception to micro-enterprise units in
manufacturing and service sectors.

•    PM-Street Vendors AtmaNirbhar Nidhi (PM-
SVANidhi): Special scheme under micro-credit
facility for street vendors providing collateral-free,
affordable term loans of ' 10,000 for one year in the
1^st tranche.

Support: Your Bank has provided loans to 40,302
Street Vendors since inception and educated and
encouraged them to adopt digital transactions
through the “Main Bhi Digital” campaign.

•    Aadhaar Seva Kendras (Aadhaar enrolment
and updation service): Your Bank provides
Aadhaar enrolment and update services at branches
that are designated as Aadhaar Seva Kendras.

Support: More than 65.8 lakh enrolments and
updates undertaken since inception basis explicit
customer request.

Our “Shift Right” strategy, launched in FY 2024., served
as the compass-anchoring transformation around five
pillars: Journeys, Channels, Core, Data, and Security.

Reimagining the Banking Experience

Across customer segments —retail, SME, and
enterprise—we reengineered critical touchpoints to be
more responsive, inclusive and insight-led.

•    86 per cent of new account acquisitions and 79
per cent service requests were fulfilled digitally,
supported by simplified onboarding, real-time
validations, and assisted journeys where needed.

•    High-volume lending products like Xpress Car
Loans, Business Loans and Gold Loans saw scale
through straight-through processing and biometric
KYC flows.

•    I n rural and semi-urban India, digitally assisted
journeys enabled credit and deposit access via local
business correspondents—reducing onboarding
time and improving branch capacities.

Our customer-first design philosophy enabled us to deliver
outcome-based journeys, not just digital workflows—
focused on speed, intuitiveness and self-resolution.

Scaling Digital Interfaces with Intelligence

Our newly upgraded Mobile and NetBanking platforms—
rolled out in phases—have ushered in a cutting-edge
experience, featuring unified views, smart navigation and
enhanced security protocols that elevate every interaction.

Conversational interfaces through HDFC BankOne
handled over 3.7 crore customer engagements monthly,
while WhatsApp Banking emerged as the preferred
channel of our customers. Over half of all service
requests now flow through digital self-service channels,
with fallback to agents only when required.

The launch of Pixel, a fully digital, app-native
credit card, saw strong traction. It is built on the
principles of configurability, real-time servicing and
contextual engagement.

Deepening Ecosystem Play: Embedded and API
Banking

Our embedded banking model evolved into an
anchoring capability:

•    We scaled integrations with partners like Tata Neu,
PhonePe and Swiggy enabling seamless API-led
journeys for retail lending and cards.

•    Over one lakh products were sourced monthly
through these ecosystems.

•    Our co-branded cards portfolio expanded
with curated benefits, contextual offers and
intelligent onboarding.

We also enhanced our cross-border offering:

•    HDFC Bank now handles over 20 per cent of India's
inbound remittances through tie-ups with Lulu
Exchange, Flywire and PayMyTuition, supported by
over 115 correspondent arrangements.

A robust API-first orchestration layer continues to
drive plug-and-play capability for partners, enabling
secure, real-time access to banking infrastructure
across platforms.

Modernising the Core for Real-Time, Resilient
Scale

Financial Year 2024-25 marked a major milestone with
the migration of our Core Banking System to a next-gen
engineered platform—making HDFC Bank one of the
largest banks in the country to host its core ecosystem
on a modern, scalable architecture.

This was complemented by:

•    The first deployment under our “Lighten the Core”
strategy-Payments Hub-which modularised IMPS
processing with reduced latency.

•    Active-active data center configurations and
infrastructure upgrades across payments,
origination and loan management platforms.

These foundational shifts allow us to handle
exponential digital growth while preserving availability
and performance.

Harnessing Data for Insight-Led Decisions

The Bank initiated a Data Lake House programme to
centralise data from across systems, enabling scalable
analytics, improving accuracy and regulatory compliance.

Built on modern open-stack technologies, the platform
supports better decision-making, standardises master
data, and strengthens governance through unified
controls, lineage tracking and reduced duplication.

Cybersecurity and Digital Risk: A Measured
Approach

As the Bank expands its digital footprint, safeguarding
customer data and ensuring system integrity remain
paramount. In FY 2025, HDFC Bank strengthened its
cybersecurity architecture with a comprehensive suite of
tools and governance frameworks designed to manage
evolving risks, ensure regulatory alignment and preserve
operational continuity.

The Bank continued to enhance its Zero Trust
Architecture, reducing reliance on perimeter defences
and embedding verification at every access point—
across users, systems and APIs. These principles now
underpin access controls, policy enforcement and cloud
governance across business-critical environments.

The Bank protects its customer data and digital services
through a range of advanced security measures. By
deploying PRISMA Cloud Infrastructure Entitlement
Management (CIEM), the Bank effectively manages and
restricts cloud permissions based on least-privilege
principles. The integration of Accops Secure Gateway
provides MFA-protected access to crucial internet¬
facing applications while Zscaler Private Access (ZPA)
ensures secure, policy-driven remote connectivity in
line with the Bank's Zero Trust roadmap. Additionally,
the Cloud Web Application Firewall (WAF) safeguards
against application-layer threats across digital channels.
Continuous monitoring, detection and remediation of
cloud misconfigurations and vulnerabilities are achieved
through the Cloud Security Posture Management (CSPM)
and Cloud Workload Protection Platform (CWPP). The
Bank also employs Cloud Access Security Broker
(CASB), Browser Isolation and CI/CD Security Controls
to secure SaaS usage and development pipelines. Lastly,
Attack Surface Monitoring (ASM) continuously scans and
secures exposed digital assets throughout the enterprise.

Collectively, these investments reinforce the Bank's
commitment to secure-by-design architecture ensuring
that innovation, scale and resilience go hand in hand with
responsible risk management.

Serving Enterprises and SMEs with Speed and
Simplicity

Our Corporate and Wholesale Banking business saw
strong digital adoption through:

•    Rollout of fully digital onboarding journeys for
working capital and trade finance.

•    Enhancements to CBX (Corporate Banking
Exchange), which now processes large volume of
transactions monthly, with API share steadily rising.

I n parallel, our SmartHub suite scaled across SME and
merchant communities with embedded finance, payments
and loan origination stitched into a single interface.

Building at Scale: Agile Tech Delivery

The Factory model continues to be the nucleus of
digital execution at HDFC Bank—with dedicated units
focused on:

•    Experience design

•    Mobile and cloud engineering

•    APIs and orchestration

•    Data and GenAI

•    Secure-by-design architecture

Various high-impact programmes were executed
in FY 2025 using this construct—ranging from core
modernisation to next-gen servicing platforms.

The Next Chapter: Responsible GenAI and
Platform-Led Innovation

Financial Year 2024-25 served as the foundation year for
AI-readiness. A structured platform approach is being
developed with focus on:

•    Secure, reusable models and components
for scalability

•    Built-in observability and compliance

The Bank is exploring a Class of Problems
methodology—prioritising high-impact, enterprise¬
wide opportunities over isolated use cases. This
approach ensures scalability, consistency and
measurable business outcomes.

Early pilots in documentation, support, underwriting
and productivity workflows have validated the potential
for GenAI to augment decision-making and reduce
operational friction.

What Lies Ahead

Financial Year 2024-25 was a year of bold action,
modernisation and simplification. In FY 2026, our focus
sharpens towards:

•    Scaling digital platforms with embedded capabilities

•    Operationalising responsible GenAI

•    Delivering contextual experiences at the edge

•    Sustaining resilience while enabling agility

HDFC Bank's technology and digital strategy remains
focused not just on keeping pace with change—but on
shaping the future of customer-centric, inclusive and
intelligent banking in India.

Cybersecurity

Cybersecurity is at the heart of the technology transformation
journey and the Bank is deeply committed to ensuring robust
cyber security with substantial advancements being made to
further fortify its infrastructure and applications. Key initiatives
in this regard include:

•    Significant advancements to consolidate cyber security
through initiatives such as the foundation of a next-
generation Cybersecurity Operations Center (CSOC)
for predictive security and incident management,
introduction of Security Orchestration, Automation and
Response (SOAR) to reduce incident response times and
network micro-segmentation for better control, visibility
and preparedness against ransomware.

•    The initiative and approach to leverage AI and ML as an
entire suite to proactively detect and respond to threats
is managed through the deployment of next generation
Security Incident Event Management (SIEM) solution
augmented by Artificial Intelligence (AI) and Machine
Learning (ML) capabilities along with strong User Entity
Behavioral Analysis (UEBA) functionalities and built-in
threat modelling.

•    24/7 defacement monitoring and vulnerability
management of the bank's internet properties, antivirus
/ malware program, patch management, penetration

testing, etc. for minimising the surface area for cyber
security attacks and fortifying the Bank's assets like
infrastructure and applications.

•    Dedicated program for attack surface management
(ASM) that includes continuous attack surface discovery
and probing for weaknesses on the discovered assets.
There has been a continuous effort to ensure that
all significant weaknesses are remediated within a
reasonable timeframe.

•    Adopting a zero-trust architecture approach to ensure
protection against cyber-attacks.

•    I mplementation of Anti-Advanced Persistence Threat
(Anti-APT) system agent on all endpoints in the Bank
to protect from zero-day malware attacks. All network
elements such as email, web as well as endpoint
computers are protected by the anti-APT system.

•    Enterprise solutions such as Data Loss Prevention (DLP)
to monitor sensitive data stored, transmitted and shared
by users, and to prevent and detect data breaches. All
endpoints have proxy agent configured to ensure that
only authorised websites are accessed. All outgoing
e-mails are monitored through DLP solution.

•    Laptop Encryption: Data encryption ensures that
business-critical and sensitive data is not misplaced,
thereby preventing any reputational damage and
curtailing monetary losses. Hard disk encryption is
implemented on all laptops.

•    Implementation of Domain-based Message
Authentication, Reporting and Conformance (DMARC)
system for protecting the Bank's domain from
unauthorized use, commonly known as ‘email spoofing'.

Technology related challenges over the past few years have
only made the Bank's resolve stronger to consolidate and
fortify its technology environment. Focused technology /
digital investments and programs in technology are pivotal to
the Bank in the new age of digital banking and experiences
for its customers.

Service Quality Initiatives and Grievance Redressal

Customer Focus is one of the five core values of the Bank.
Given a highly competitive business environment, especially
with diverse lines of businesses, we continuously strive to
enhance customer experience. Delivering exceptional product

quality and customer service is a prerequisite for sustained
growth. The Bank strives to achieve this by seeking customer
feedback, benchmarking with best-in-class business entities
and implementing customer-centric improvements. We have
adopted a well-defined three-step strategy towards Customer
Service - Define, Measure and Improve. Towards improving
customer experience, the Bank has adopted industry best
practices and continuously acts on customer feedback
secured across multiple channels.

HDFC Bank has adopted a multi-pronged approach to
provide an omnichannel experience to its customers. On
the one hand, it has traditional touchpoints like branches,
email care and PhoneBanking. On the other hand, it has
state-of-the-art platforms like NetBanking, MobileBanking,
WhatsApp Banking, the chatbot Eva and the Bank's exclusive
social care handles. The Bank also has a Virtual Relationship
Management programme to cater to various financial needs
in a personalised manner.

One of the key strategies adopted by your bank is to leverage
the benefits of Artificial Intelligence (AI) and Automation in
providing better customer service - which entails (a) Speed
of Response (b) Accuracy of Response (c) Response being In
line with regulatory prescriptions and (d) in-depth root cause
analysis to reduce/eliminate recurrence of customer grievances.

Customer service performance and grievance redressal are
regularly assessed at various levels, including Branch Level
Customer Service Committees, Virtual Level Customer
Service Committees, Standing Committee on Customer
Service and Customer Service Committee of the Board. HDFC
Bank has implemented robust processes to monitor and
measure service quality levels across touchpoints, including
at product and process level through the efforts of the Quality
Initiatives Group.

The service quality team conducts regular reviews across
various products, processes and channels, focusing on
improving the customer experience. A unique Service Quality
Index (SQI) has been developed to measure the performance
of key customer facing channels based on critical customer
service parameters. This SQI enables customer facing
channels to identify improvement areas, thereby raising
service standards.

One of the basic building blocks of providing acceptable
level of customer service is to have an effective Internal
Grievance Redressal Mechanism / Framework. HDFC Bank
has developed a comprehensive Grievance Redressal Policy,
Customer Rights Policy, Customer Protection Policy and a

Customer Compensation Policy duly approved by the Board
which outline a framework for resolving customer grievances
in an effective manner. These policies are accessible to
customers through the Bank's website and branch network.

HDFC Bank has created multiple channels for customers
to provide feedback and register grievances facilitating
a transparent and accessible system. As a pioneer in
innovative financial solutions and digital platforms, the
Bank has witnessed an increased utilisation of its digital
channels. Keeping customer interest in focus, the Bank has
formulated a Board approved Protection Policy which limits
the liability of customers in case of unauthorised electronic
banking transactions.

This Bank is compliant with the RBI Internal Ombudsman
Scheme of RBI Guidelines. At the apex level, as a part of
the Internal Grievance Redressal mechanism, the Bank has
appointed seasoned-retired bankers as Internal Ombudsmen
to independently review any customer grievance which is
partly/wholly rejected by the Bank before the final decision is
communicated to the customer.

HDFC Bank is on a journey to measure customer loyalty
through a high velocity, closed loop customer feedback
system. This customer experience transformation programme
helps employees to empathise better with customers and
improve turnaround times. Branded as ‘Infinite Smiles',
the programme helps establish behaviours and practices
that result in customer-centric actions through continuous
improvement in products, services, processes and policies.

The Bank remains committed to placing the customer at the
centre of its operations. By consistently improving customer
experience, adopting an omnichannel approach and
implementing robust service quality and grievance redressal
mechanisms, it aims to build and nurture lasting relationships.

Risk Management and Portfolio Quality

Your Bank's historical focus on Pillar 1 risks, including Credit
Risk, Market Risk and Operational Risk has been expanded
in response to the evolving banking landscape. Liquidity
Risk, Information Technology Risk, Information Security Risk,
Group Risk and Model Risk have also emerged as critical
considerations. These risks not only impact your Bank's
financial strength and operations but also its reputation. To
address these concerns, your Bank has established Board-
approved risk strategy and policies overseen by the Risk Policy
and Monitoring Committee (RPMC). RPMC is a Board level
committee, which supports the Board by supervising the

implementation of the risk strategy. It guides the development
of policies, procedures and systems for managing risk. It
ensures that these are adequate and appropriate to changing
business conditions, the structure and needs of the Bank and
the risk appetite of the Bank. It ensures that frameworks are
established for assessing and managing various risks faced
by the Bank, systems are developed to relate risk to the
Bank's capital level and methods are in place for monitoring
compliance with internal risk management policies and
processes.

The hallmark of your Bank's risk management function is that it
is independent of the business sourcing unit with convergence
only at the CEO level.

The gamut of key risks faced by the Bank which are
dimensioned and managed include:

•    Financial Risks:

•    Credit Risk,

•    Market Risk

•    Interest Rate Risk in the Banking Book

•    Liquidity Risk

•    Intraday Liquidity Risk

•    Intraday Credit Risk

•    Credit Concentration    Risk

•    Non-Financial Risks

•    Operational Risk

•    I nformation Technology and Information
Security Practices

•    Technology Risk

•    Third Party Products    Risk

•    Outsourcing Risk

•    Group Risk (various risks pertaining to subsidiaries)

•    Model Risk

•    People Risk

•    Business Risk

•    Strategic Risk

•    Compliance Risk

•    Reputation Risk

Financial Risks:

Credit Risk

Credit Risk is the possibility of losses associated with
diminution in the credit quality of borrowers or counterparties.
Losses stem from outright default or reduction in portfolio
value. Your Bank has a comprehensive credit risk architecture,
policies, procedures and systems for managing credit risk
in its retail and wholesale businesses. Wholesale lending
is managed on an individual as well as portfolio basis. In
contrast, given the granularity of individual exposures, retail
lending is managed largely on a portfolio basis across
various products and customer segments. Robust front-end
and back-end systems are in place to ensure credit quality
and minimise default losses. The factors considered while
sanctioning retail loans include income, demographics,
credit history, loan tenure and banking behavior. In addition,
multiple credit risk models are developed and used to assess
different segments of customers based on portfolio behavior.
In wholesale loans, credit risk is managed by capping
exposures based on borrower group, industry, credit rating
grades and country, among others. This is backed by portfolio
diversification, stringent credit approval processes, periodic
post-disbursement monitoring and remedial measures. Your
Bank has ensured strong asset quality through volatile times
in the lending environment by stringently adhering to prudent
norms and institutionalised processes. Your Bank also has a
robust framework for assessing Counterparty Banks, which
are reviewed periodically to ensure interbank exposures are
within approved appetite.

As on March 31, 2025, your Bank's ratio of Gross Non¬
Performing Assets (GNPAs) to Gross Advances was 1.33 per
cent. Net Non- Performing Assets (Gross Non-Performing
Assets Less Specific Loan Loss provisions) was 0.43 per cent
of Net Advances.

Your Bank has a conservative and prudent policy for specific
provisions on NPAs. Its provision for NPAs is higher than
the minimum regulatory requirements and adheres to the
regulatory norms for Standard Assets.

Credit Risk emanating from digital lending

Driven by rapid technological advancements, the banking
sector is witnessing the increasing importance of digitalisation
as a critical differentiator for customer retention and service
delivery. Digital lending has emerged as a convenient and
quick method for customers to secure loans with just a
few clicks, often in minutes. However, addressing the risks
associated with digital lending is crucial, and your Bank has
implemented appropriate measures to manage these risks
effectively. Digital loans are sanctioned primarily to your Bank's
existing customers. Often, they are customers across multiple
products, thus enabling the Bank ready access to their
credit history and risk profile. This accessibility facilitates the
evaluation of their loan eligibility. Moreover, the credit checks
and scores used by your Bank in process-based underwriting
are replicated for digital loans. This ensures consistency in the
evaluation process.

Market Risk

Market Risk arises primarily from your Bank's statutory reserve
management and trading activity in interest rates, equity
and currency market. These risks are managed through a
well-defined Board approved Market Risk Policy, Investment
Policy, Foreign Exchange Trading Policy and Derivatives Policy
that caps risk in different trading desks or various securities
through trading risk limits/triggers. The risk measures include
position limits, tenor restrictions, sensitivity limits, namely,
PV01, Modified Duration of Hold to Maturity Portfolio and
Option Greeks, Value-at-Risk (VaR) Limit, Stop Loss Trigger
Level (SLTL), Scenario-based P&L Triggers, Potential Loss
Trigger Level (PLTL), YTD Trigger for AFS book. These limits
are monitored on an end-of-day basis by treasury mid office.
In addition, forex open positions, currency option delta and
interest rate sensitivity limits are computed and monitored
on an intraday basis. This is supplemented by a Board-
approved stress testing policy and framework that simulates
various market risk scenarios to measure losses and initiate
remedial measures. Your Bank's Market Risk capital charge is
computed daily using the Standardised Measurement Method
applying the regulatory factors.

Liquidity Risk

Liquidity risk is the risk that the Bank may not be able to
meet its financial obligations as they fall due without incurring
unacceptable losses. Your Bank's liquidity and interest rate
risk management framework is spelt out through a well-
defined Board approved Asset Liability Management Policy.
As part of this process, your Bank has established various
Board-approved limits for liquidity and interest rate risks in

the banking book. The Asset Liability Committee (ALCO) is a
decision-making unit responsible for implementing the liquidity
and interest rate risk management strategy of the Bank in line
with its risk management objectives and ensures adherence
to the risk tolerance/limits set by the Board. ALCO reviews
the policy's implementation and monitoring of limits. While
the maturity gap, Basel III ratios, and stock ratio limits help
manage liquidity risk, Net Interest Income impact and Market
Value of Equity (MVE) impact help mitigate interest rate risk
in the banking book. This is reinforced by a comprehensive
Board-approved stress testing programme covering both
liquidity and interest rate risk.

Your Bank conducts various studies to assess the behavioural
pattern of non-contractual assets and liabilities and
embedded options available to customers, which are used
while managing maturity gaps and repricing risk respectively.
Further, your Bank has the necessary framework to manage
intraday liquidity risk.

The Liquidity Coverage Ratio (LCR) is one of the Basel
Committee's key reforms to develop a more resilient banking
sector. The LCR, a global standard, is also used to measure
your Bank's liquidity position. LCR seeks to ensure that the
Bank has an adequate stock of unencumbered High-Quality
Liquid Assets (HQLA) that can be converted into cash easily
and immediately to meet its liquidity needs under a 30-day
calendar liquidity stress scenario. The LCR helps in improving
the banking sector's ability to absorb shocks arising from
financial and economic stress, whatever the source, thus
reducing the risk of spillover from the financial sector to the
real economy.

The Net Stable Funding Ratio (NSFR), a key liquidity risk
measure under BCBS liquidity standards, is also used to
measure your Bank's liquidity position. The NSFR seeks to
ensure that your Bank maintains a stable funding profile in
relation to the composition of its assets and off-balance sheet
activities. The NSFR promotes resilience over a longer-term
time horizon by requiring banks to fund their activities with
more stable sources of funding on an ongoing basis. The RBI

guidelines stipulated a minimum NSFR requirement of 100 per
cent at a consolidated level and your Bank has maintained
the NSFR well above 100 per cent since its implementation.
Based on guidelines issued by RBI, your Bank's NSFR stood
at 119.80 per cent on a consolidated basis at March 31,2025.

Non-financial Risks:

Operational Risk

This is the risk of loss resulting from inadequate or failed internal
processes, people and systems or from external events. It also
includes risk of loss due to legal risk but excludes strategic
and reputational risk.

Given below is a detailed explanation under four different
heads: Framework and Process, Internal Control, Information
Technology and Information Security Practices and Fraud
Monitoring and Control.

A. Framework and Process

To manage Operational Risks, your Bank has established
a comprehensive Operational Risk Management
Framework, whose implementation is supervised by the
Operational Risk Management Committee (ORMC) and
reviewed by the RPMC of the Board. An independent
Operational Risk Management Department (ORMD)
is responsible for implementing the framework. The
framework incorporates, three lines of defence to
ensure implementation.

Three Lines of Defense model for Operational
Risk Management

•    In order to achieve the aforesaid objective pertaining
to operational risk management framework, the ORMC
guides and oversees the functioning, implementation, and
maintenance of operational risk management activities of
Bank, with special focus on:

•    I dentification and assessment of risks across the Bank
through the Risk and Control Self-Assessment (RCSA)
and Scenario analysis

•    Measurement of Operational Risk based on the actual
loss data

•    Monitoring of risk through Key Risk Indicators (KRI)

•    Management and reporting through KRI, RCSA and
operational risk losses of the Bank

B. Internal Control

Your Bank has implemented sound internal control
practices across all processes, units and functions. It has
well laid down policies and processes for the management
of its day-to-day activities. Your Bank follows established,
well-designed controls, which include traditional four eye
principles, effective segregation of business and support
functions, segregation of duties, call back processes,
reconciliation, exception reporting and periodic MIS.
Specialised risk control units function in risk- prone
products/ functions to minimise operational risk. Controls
are tested as part of the SOX control testing framework.

C. Information Technology and Information
Security Practices

Your Bank operates in a highly automated environment
and makes use of the latest technologies available on
cloud or on-premises Data Centres to support various
business segments. With the advent of new technology
tools and increased sophistication, your Bank has
improved its efficiency, reduced operational complexities,
aided decision making and enhanced the accessibility of
products and services. This results in various risks such
as those associated with the use, ownership, operation,
redundancy, involvement, influence, and adoption of IT
within an enterprise, as well as business disruption due
to technological failures. Additionally, it can lead to risks
related to information assets, data security, integrity,
reliability, and availability, among others. Your Bank
has put in place a governance framework, Information
Security Practices, Business Continuity Plan, Disaster
Recovery (DR) resiliency, Public Cloud and Cloud Native
Services Adoption and Enhanced Automated Monitoring
mechanisms to mitigate Information Technology and
Information Security-related risks. Our Bank continues
to enhance its information security posture through a
range of strategic and technology-driven initiatives aimed
at strengthening its information security and resilience
against evolving cyber threats.

a.    The Next-generation Cybersecurity Operations
Center (CSOC) has brought in significant
advancements to improve overall cyber security
posture of the Bank by deploying a predictive
/ proactive security monitoring of Bank IT
Infrastructure and Applications. We have deployed
next generation Security Incident Event Management
(SIEM) solution augmented by Artificial Intelligence
(AI) and Machine Learning (ML) capabilities along
with strong User Entity Behavioral Analysis (UEBA)
functionalities and built-in threat modelling.

b.    The Bank's dedicated Attack Surface Management
(ASM) program is aimed at continuously identifying
and addressing vulnerabilities across its assets,
thereby ensuring a secure environment for the Bank
and its customers.

c.    Additionally, vulnerability management of the Bank's
internet properties, penetration testing, antivirus /
anti-malware program etc. minimize the surface
area for cyber security attacks.

d.    Our centralized patch management tool automates
the discovery, management, and remediation of
endpoints and servers across various operating
systems and environments for the available patches.
It further facilitates patching, software deployment,
and compliance with security standards, thus
reducing the risk of the introduction of vulnerability
due to lack of timely patching.

e.    With the growing use of cloud infrastructure,
tools such as Cloud Posture and Access Security
Tools (CSPM & CASB) have been implemented
to detect misconfigurations, enforce compliance
requirements, and proactively reduce cloud-related
risks.

f.    Our Red Team proactively assesses our cyber
assets for vulnerabilities through various periodic
tests which also include red team assessments.
Any issues identified during the assessments are
remediated in a timely manner to ensure that the
banking services remain resilient and stay protected
against the evolving threats.

g.    Our Bank has also adopted zero-trust architecture
approach to ensure protection against cyber¬
attacks.

h.    Bank's comprehensive e-learning module, iSecurity
Ambassador (iSA), a mandatory assessment-based
course on information and cyber security, helps in
promoting security awareness culture in the Bank.

Overall, the bank's cybersecurity measures are focused
on ensuring the highest level of protection against cyber
threats, with proactive monitoring and automated incident
response capabilities, enhanced network visibility and a
zero-trust approach to security.

The Bank has defined various policies and frameworks
for managing the IT and Information Security risks
including risks emanating from third party engagements
and it follows the three lines of defence principle in
managing these risks. With the evolving changes in the
technology landscape, the Bank has been reviewing and
enhancing the scope for monitoring and mitigating the
risks through revision of frameworks and policies, tools,
and governance.

Your Bank has a well-defined Business Continuity and
Disaster Recovery plan that is periodically tested to
ensure that it can meet any operational contingencies.
Further, there is a well-documented crisis management
plan in place to address the strategic issues of a crisis
impacting the Bank and to direct and communicate the
corporate response to the crisis including cyber crisis.
In addition, employees periodically undergo mandatory
business continuity awareness training and sensitisation
exercises on a periodic basis.

For details on Business Continuity Management,
Information and Cyber Security Practices and Data
Privacy Measures, please refer page 106 to 111 and
231 & 239.

An independent assurance team within Internal Audit
acts as a third line of defence that provides assurance
on the management of IT-related risks.

D. Fraud Monitoring and Control

Your Bank has defined a comprehensive Fraud Risk
Management Policy encompassing the life cycle, i.e.
prevention, detection, investigation, accountability,
monitoring, recovery, analysis and reporting. Further, the
Bank has Whistle Blower and Vigilance Policies and there
are designated functions responsible for implementation
of fraud prevention measures. Frauds are investigated to
identify the root cause and relevant corrective steps are
recommended to prevent recurrence.

Fraud Monitoring committees at the senior management
and Board level also deliberate on high value fraud
events and advise preventive actions. Periodic
reports are submitted to the Board and senior
management committees.

Compliance Risk

Compliance Risk is defined as the risk of impairment of your
Bank's integrity, leading to damage to its reputation, legal or
regulatory sanctions, or financial loss, as a result of a failure (or
perceived failure) to comply with applicable laws, regulations
and standards. Your Bank has a Compliance Policy to ensure
the highest standards of compliance. A dedicated team of
subject matter experts in the Compliance Department works
with business, support and operations teams to ensure active
Compliance Risk management and monitoring. The team
also provides advisory services on regulatory matters. The

focus is on identifying and reducing risk by rigorously testing
products and also putting in place robust internal policies.
Products that adhere to regulatory norms are tested after
rollout and shortcomings, if any, are fully addressed till the
product stabilises. Internal policies are reviewed and updated
periodically as per agreed frequency or based on market
actions or regulatory guidelines/ actions. The compliance
team also seeks regular feedback on regulatory compliance
from product, business and operation teams through self¬
certifications and monitoring.

Group Risk

Your Bank has diverse set of subsidiaries including NBFC,
AMC, Life Insurance, General Insurance, Venture Capital
entities, amongst others. In order to manage the risk arising
from subsidiaries with regard to potential uncertainties or
adverse events that can impact the operations, financial
stability, reputation of the Group, your Bank has established
Group Risk Management function within the Risk Management
Group. Your Bank shall have a reasonable oversight on the
Risk Management Framework of the group entities on an
ongoing basis through Group Risk Management Committee
(GRMC) and Group Risk Council (GRC). The Board / Risk
Management committees of respective subsidiary shall be
driving the day to day risk management in accordance with
the requirements of the respective regulator. Stress testing
for the group is carried out by integrating the stress tests of
the subsidiaries. Similarly, capital adequacy projections are
formulated for the group after incorporating the business/
capital plans of the subsidiaries. The Group Risk Management
Committee reports to the Bank's Risk Policy & Monitoring
Committee (RPMC).

Group Oversight Framework:

As HDFC Bank continues to grow in scale and complexity as the
parent of a diversified financial group, the need for coordinated
oversight across group entities has become increasingly
important. In April 2024, the Bank formally introduced a
Group Oversight Framework to reinforce governance across
subsidiaries. This initiative aligns with regulatory expectations
set out in the inter-regulatory forum reports by the Reserve
Bank of India (RBI), Securities and Exchange Board of India
(SEBI) and Insurance Regulatory and Development Authority
of India (IRDAI) on the monitoring of systemically important
financial intermediaries.

The Framework applies to H DFC Bank and its group companies
that are consolidated in the Bank's financial statements, with
the exception of entities where the Bank neither exercises

significant control nor qualifies as a significant beneficial
owner-such as HDFC Mutual Fund, Alternative Investment
Funds and Separately Managed Accounts managed or
advised by HDFC Asset Management Company Limited and
its international subsidiary.

The Framework establishes a defined structure for oversight,
reporting and escalation across the Group. The Board of HDFC
Bank exercises overall oversight through periodic information
reported by various stakeholders. The Group Oversight
Department reports critical matters to the Board, including
critical overdue action items, material risks, exceptions in intra¬
group transactions, material related-party transactions and
significant governance concerns (if any).

Enabling and control functions of the Bank report Group-level
key metrics and any observed exceptions through designated
channels. Oversight responsibilities and escalation protocols
are set out in the framework and is illustrated as below.

Model Risk

The use of models invariably presents model risk, which is the
potential for adverse consequences from decisions based on
incorrect or misused model outputs and reports. The Model
Risk Management (MRM) under Risk Management Group
is responsible for testing and verifying the accuracy and
reliability of models used within the Bank. By establishing a
dedicated MRM team, your Bank ensures that its models are
independently evaluated before implementation and on an
ongoing basis.

There is an established Model Risk Management Policy
(MRM Policy) which is a centralized, overarching policy whose
objective is to provide comprehensive guidance on model
risk management across the Bank. The policy defines the
roles and responsibilities across stakeholders i.e., Model

Owners, Model Users, Model Developers, and the Model Risk
Management (MRM).

There is Model Risk Management Committee (MRMC)
which is an executive committee to govern the Model Risk
Management Framework as defined in the MRM policy. It also
oversees the development and implementation of MRM policy,
governance structure and ensure that necessary processes
and systems are put in place. The Committee reviews the
results of the model validation/monitoring on a periodic basis.
The MRMC shall report to the Bank's Risk Policy & Monitoring
Committee (RPMC).

ICAAP

Your Bank has a structured management framework in the
Internal Capital Adequacy Assessment Process (ICAAP) for
the identification and evaluation of all material risks that the
Bank is exposed to, which may have an adverse material
impact on its financial position. Your Bank has identified
material risks which include, in addition to Pillar 1, several
Pillar 2 risks for which capital is primarily quantified using
stress testing approach. The ICAAP framework is guided by
the Board approved ICAAP Policy. The ICAAP encompasses
assessment of capital adequacy for the base period and for
the projected plan years.

Climate Risk

The risks from climate change are divided into (i) Physical risk
(acute and chronic) which captures economic losses from
acute impacts on account of extreme weather events or long¬
term chronic impact on environment and (ii) Transition risks
which captures financial asset level losses due to the possible
process of adjustment to a low carbon economy.

The CSR and ESG committee of the Board oversees your
Bank's sustainability and climate change initiatives. This
Committee monitors the ESG framework, the Environmental
Policy framework, actionables and initiatives strategised and
executed by the management level ESG Apex Council and
the ESG Working Groups.

The Committee also maintains an oversight over your Bank's
ESG disclosures, highlighting your Bank's ESG performance
and prioritisation of material topics. A dedicated ESG vertical
works in conjunction with several internal and external
stakeholders, to drive your Bank's ESG agenda including
managing, mitigating and reporting on climate metrics. The
Deputy Managing Director of the Bank has direct oversight on
the ESG function and reports to the Board on such matters.
Further, your Bank has formulated its ESG policy framework

and ESG Risk Management (ESGRM) Framework, which are
integrated into the Bank's wholesale credit appraisal process.
Specifically, your Bank's ESGRM Framework addresses
climate transition and mitigation plan and includes a prohibition
list criterion and ‘Category-A' tagging of climate risk-related
vulnerable sectors. Your Bank's commitment to enhance its
portfolio from a climate and ESG perspective is reflected in the
development of the Board approved Sustainable Financing
Criteria Framework, which aligns with the overall sustainability
strategy of the Bank.

Your Bank is in the process of evaluating appropriate
methodology and frameworks to assess climate transition risk
for the wholesale borrowers. Your Bank also estimates financed
emissions in its lending portfolio and is firming up an internal
strategy on tracking its portfolio-based financed emissions.
Additionally, your Bank has taken initiatives to engage in
capacity building programmes to familiarise the Board and
its staff members on the key developments in climate risk
assessment, considering this risk is continuously evolving.

Additionally, your Bank is continuously striving to align itself
to make increased climate risk related disclosures in line with
domestic and global regulations. Your Bank endeavours to
align with climate risk related disclosures as per Task Force on
Climate-Related Financial Disclosures (TCFD) framework and
has been reporting on ESG KPIs in alignment with the Global
Reporting Initiative (GRI) since FY2014, along with reporting
in line with the SEBI-mandated Business Responsibility
and Sustainability Reporting (BRSR) framework in its
annual disclosures.

Stress Testing Framework

Your Bank has implemented a Board approved Stress
Testing Policy and Framework which forms an integral part of
the Bank's ICAAP. Stress testing involves the use of various
techniques to assess your Bank's potential vulnerability
to extreme but plausible stressed business conditions.
The changes in the levels of Pillar I risks and select Pillar
II risks, along with the changes in the on and off-Balance
Sheet positions of your Bank are assessed under assumed
‘stress' scenarios and sensitivity factors. The suite of stress
scenarios includes topical themes depending on prevailing
geopolitical / macroeconomic / sectoral and other trends.
The stress testing outcome may be analysed through
capital impact and/or identification of vulnerable borrowers
depending on the scenario.

Business Continuity Planning (BCP)

Your Bank has a strong BCP programme in place that
enables operational resilience and continuity in delivering
quality services across various business cycles. With our ISO
22301:2019 certified Business Continuity Programme, we
prioritise minimising service disruptions and safeguarding our
employees, customers and business during any unforeseen
adverse events or circumstances. The Programme is designed
in accordance with the guidelines issued by regulatory bodies.
Further, our programme undergoes regular internal, external
and regulatory reviews.

The Business Continuity Management function focusses
on strengthening the Bank's preparedness for continuity.
Oversight over programme is provided by the Business
Continuity Steering Committee (BCSC), chaired by the Group
Chief Risk Officer and Risk & Policy Monitoring Committee
(RPMC), a Board-level committee.

The programme is guided by an enterprise-wide Board
approved BCM Policy, supported by comprehensive processes
and procedures. These enable the Bank to effectively respond
to, recover from, resume and restore critical business functions
following disruptions caused by internal or external risk events.
The framework clearly defines roles and responsibilities for
teams involved in Crisis Management, Business Recovery,
Emergency Response and IT Disaster Recovery, ensuring a
coordinated approach.

So e of the key roles in this programme are as follows:

As a responsible Bank, these steadfast practices have enabled
us to continue seamless service delivery to our customers
through disruptiveeventsand beyond.

Internal Controls, Audit and Compliance

Your Bank has put in place extensive internal controls and
processes that are commensurate with the size and scale
of the Bank to mitigate Operational and other allied risks,
including centralised operations and ‘segregation of duty'
between the front and back-office. The front-office units
usually act as customer touchpoints and sales and service
outlets while the back-office carries out the entire processing,
accounting and settlement of transactions in the Bank's
core banking system. The policy framework, definition and
monitoring of limits is carried out by various mid-office and
risk management functions. The credit sanctioning and debt
management units are also segregated and do not have any
sales and operations responsibilities.

Your Bank has set up various executive-level committees,
with participation from various business and control functions,
that are designed to review and oversee matters pertaining to
capital, assets and liabilities, business practices and customer
service, operational risk, information security, business
continuity planning and internal risk-based supervision among
others. The second line of defence functions set standards

and lay down policies and procedures by which the business
functions manage risks, including compliance with applicable
laws, compliance with regulatory guidelines, adherence to
operational controls and relevant standards of conduct. At the
ground level, your Bank has a mix of preventive and detective
controls implemented through systems and processes,
ensuring a robust framework in your Bank to enable correct
and complete accounting, identification of outliers (if any) by
the management on a timely basis for corrective action and
mitigating operational risks.

Your Bank has put in place various preventive controls, including:

a)    Limited and need-based access to systems by users

b)    Dual custody over cash and near-cash items

c)    Segregation of duty in processing of transactions vis-a¬
vis creation of user IDs

d)    Segregation of duty in processing of transactions
vis-a-vis monitoring and review of transactions
/ reconciliation

e)    Four eye principle (maker-checker control) for processing
of transactions

f)    Stringent password policy

g)    Booking of transactions in core banking system
mandates the earmarking of line/limit (fund as well as
non-fund based) assigned to the customer

h)    STP processes between core banking system and
payment interface systems for transmission of messages

i)    Additional authorisation leg in payment interface systems
in applicable cases

j)    Audit logs directly extracted from systems

k)    Empowerment grid

Your Bank also has detective controls in place:

l)    Periodic review of user IDs and its usage logs

m)    Post-transaction monitoring at the back-end by way
of call back process (through daily log reports) by an
independent person, i.e., to ascertain that entries in the
core banking system / messages in payment interface
systems are based on valid/authorised transactions and
customer requests

n)    Daily tally of cash and near-cash items at end of day

o)    Reconciliation of Nostro accounts (by an independent
team) to ascertain and match-off the Nostro credits and
debits (external or internal) regularly to avoid / identify
any unreconciled/ unmatched entries passing through
the system

p)    Reconciliation of all internal/transitory accounts and
establishment of responsibility in case of outstanding

q)    I ndependent and surprise checks periodically
by supervisors.

Your Bank has an Internal Audit Department which is
responsible for independently evaluating the adequacy
and effectiveness of internal controls, risk management,
compliance with extant regulations, governance systems
and processes and is manned by appropriately qualified and
experienced personnel.

This department adopts a risk-based audit approach and carries
out audits across various businesses i.e., Retail, Wholesale and
Treasury (for India and Overseas books), Audit of Operations
units, Audit of Control functions, Management and Thematic
audits, Information Security audit, Revenue audit, Spot checks
and Concurrent audit in order to independently evaluate the
adequacy and effectiveness of internal controls on an ongoing
basis and proactively recommending enhancements thereof.

The Internal Audit Department, during the course of audit, also
ascertains the extent of adherence to regulatory guidelines,
legal requirements and operational processes and provides
timely feedback to the management for corrective actions. A
strong oversight on the operations is also kept through off-site
monitoring by use of data analytics and automation tools to
study trends/patterns to detect outliers (if any) and alert the
management for due corrective action, wherever warranted.

The Internal Audit Department also independently reviews
your Bank's implementation of Internal Rating Based (IRB) -
approach for calculation of capital charge for Credit Risk, the
appropriateness of your Bank's ICAAP, as well as evaluates
the quality and comprehensiveness of your Bank's disaster
recovery and business continuity plans and also carries out
management self-assessment of adequacy of the Bank's
internal financial controls and operating effectiveness of
such controls in terms of Sarbanes Oxley (SOX) Act and
Companies Act, 2013. The Internal Audit Department plays
an important role in strengthening of the control functions by
periodically reviewing their practices and processes as well as
recommending enhancements thereof. Additionally, oversight
is also kept on the functioning of the subsidiaries, related
party transactions and extent of adherence to the licensing
conditions of the RBI.

Any new product / process introduced in your Bank is
reviewed by Compliance function in order to ensure adherence
to regulatory guidelines. The Audit function may, if deemed
necessary also proactively recommend improvements
in operational processes and service quality for such new
products / processes.

To ensure independence, the Internal Audit Function has a
direct reporting line to the Audit Committee of the Board and
an administrative line reporting to the Managing Director for
administrative purposes.

The Compliance function independently tracks, reviews and
ensures compliance with regulatory guidelines and promotes
a compliance culture in the Bank.

Your Bank has a comprehensive Know Your Customer (KYC),
Anti Money Laundering (AML) and Combating Financing of
Terrorism (CFT) policy (based on the RBI guidelines/provisions
of the Prevention of Money Laundering Act, 2002) incorporating
the key elements of Customer Acceptance Policy, Customer
Identification Procedures, Risk Management and Monitoring
of Transactions. The policy is subject to an annual review and
is duly approved by the Board.

Your Bank besides having robust controls in place to ensure
adherence to the KYC guidelines at the time of account
opening also has monitoring processes at various stages of
the customer lifecycle including a continuous review process in
the form of transaction monitoring carried out by a dedicated
AML CFT monitoring team, which carries out transaction
reviews for identification of suspicious patterns/trends that
enables your Bank to further carry out enhanced due diligence
(wherever required) and appropriate actions thereafter.

The Audit team and the Compliance team undergo regular
training and certifications, both in-house and external to equip
them with the necessary know-how and expertise to carry out
the function.

The Audit Committee of the Board reviews the effectiveness
of controls, compliance with regulatory guidelines as also the
performance of the Audit and Compliance functions in your
Bank and provides direction, wherever deemed fit. The Audit
function is also subject to periodic external assurance reviews.
Your Bank has always adhered to the highest standards of
compliance and has put in place appropriate controls and risk
measurement and risk management tools to ensure a robust
compliance and governance structure.

Performance of Subsidiary Companies

Your Bank has five key subsidiaries, HDFC Life Insurance
Company Limited (HDFC Life), HDB Financial Services Limited
(HDBFSL), HDFC ERGO General Insurance Company Limited
(HDFC ERGO), HDFC Asset Management Company Limited
(HDFC AMC) and HDFC Securities Limited (HSL). HDFC Life
is a leading, listed, long-term life insurance solutions provider
in India. HDBFSL is a leading NBFC that caters primarily to
segments not covered by the Bank. HDFC ERGO offers a
complete range of general insurance products. HDFC AMC is
Investment Manager to HDFC Mutual Fund, one of the largest
mutual funds in the country while HSL is among India's leading
retail broking firms.

Amongst the Bank's key subsidiaries, HDFC Life Insurance
Company Limited and HDFC ERGO General Insurance
Company Limited prepare their financial results in accordance
with Indian GAAP and other subsidiaries do so in accordance
with the notified Indian Accounting Standards (‘Ind-AS').

The detailed financial performance of the companies is
given below.

HDFC Life Insurance Company Limited (HDFC Life)

Established in 2000, HDFC Life Insurance Company Limited
(‘HDFC Life' or the ‘Company') is a leading provider of long¬
term life insurance solutions in India. It offers a broad range
of individual and group plans across the Protection, Pension,
Savings, Investment, Annuity, and Health categories, with
a portfolio comprising over 70 products and optional riders
designed to meet the diverse needs of its customers.

The Financial Year 2024-25 was a year in which HDFC
Life deepened its reach, continued sharpening its value
propositions and demonstrated the resilience of its business
model. The Company reported 18 per cent growth in Individual
APE (Annualised Premium Equivalent) for FY2025, in line with
the stated growth aspirations for the year. This growth was
broad-based, driven in equal measure by an increase of 9
per cent in policies written and an increase of 9 per cent in
average ticket size.

Based on FY2025 industry data, HDFC Life outperformed
both the private peers and the overall sector. HDFC Life's
overall industry market share expanded by about 70 bps to
11.1 per cent and about 30 bps to 15.7 per cent in the private
sector. Notably, the Company's policy count grew faster than
the overall industry and private sector. Almost 75 per cent of
the Company's new customers on-boarded in FY2025 were
first-time buyers from HDFC Life, reflecting its expanding reach
across Tier I, II and III markets.

In FY2025, HDFC Life known for its innovative products and
customer-centric approach has secured about 5 crore lives
with an overall claim settlement ratio of 99.8 per cent. The
company has over 650 branches across India.

For FY2025, HDFC Life reported New Business Margin of
25.6 per cent, Value of New Business of ' 3,962 crore, an
Embedded Value of ' 55,423 crore and delivered Profit After
Tax of ' 1,802 crore. As of March 31 2025, HDFC Life had an
AUM of ' 3,36,282 crore.

HDFC Life has consistently delivered positive and range-bound
operating variance over the past nine years (excluding Covid),
underscoring prudent risk management, disciplined execution
and strong fundamentals. Moreover, aligning with the stated
aspirations, the Company has nearly doubled all significant
metrics between FY21 and FY2025. The Company was also
recognised as a Great Place to Work and amongst the top 50
companies in India for building a culture of innovation.

As the Company steps into its 25^th year of operations, the focus
remains clear - to build a future-ready life insurer that grows
sustainably, serves responsibly and innovates purposefully.

HDB Financial Services Limited (HDBFSL) is a subsidiary of
HDFC Bank and is a Non-Banking Finance Company (NBFC).
HDBFSL has a comprehensive bouquet of products and
service offerings that are tailor-made to suit its customers'
requirements including first-time borrowers and the
underserved segments.

HDBFSL is engaged in the business of lending, fee-based
products and BPO services.

The company's Profit After Tax stood at ' 2,176 crore as on
March 31, 2025 compared to ' 2,461 crore as on March 31,
2024. The Total Loan Book stood at ' 1,06,878 crore as on
March 31, 2025 compared to ' 90,218 crore as on March 31,
2024, a growth of 18.47 per cent. The asset quality remained
robust, with Gross Non Performing Asset (GNPA) ratio at 2.26
per cent and Net Non Performing Asset (NNPA) ratio at 0.99
per cent as on March 31, 2025. GNPA stood at 1.90 per cent
and NNPA at 0.63 per cent for the year ended March 31,
2024. Capital Adequacy Ratio stood at 19.22 per cent as on
March 31, 2025.

HDBFSL has continued to focus on diversifying its products
and expanding its distribution while augmenting its digital
infrastructure and offerings to effectively deliver credit
solutions. The company has a strong network of over 1,771
branches spread across 1,170 cities. As on March 31, 2025,
your Bank held 94.32 per cent stake in HDBFSL.

HDBFSL has a diverse range of product offerings (secured
and unsecured) to various customer segments. Given below
are the key product as well as service offerings to various
customer segments.

On October 19, 2024, the Board of Directors of HDFC Bank
approved sale of such number of shares of HDBFSL equivalent
to up to ' 10,000 crore in the Initial Public Offering (“IPO”) of
HDBFSL, by way of Offer for Sale. The IPO also consists of a
fresh issue of such number of shares of HDBFSL equivalent
to up to ' 2,500 crore, and accordingly the IPO would be
for an aggregate amount of ' 12,500 crore. The Red Herring
Prospectus in relation to the IPO was filed on June 19, 2025
and the price band for the issue has been fixed at ' 700 to
' 740 per share. The anchor bidding date would be June 24,
2025 and the public issue would open on June 25, 2025 and
close on June 27, 2025.

Consumer Loans

Consumer Loans are provided to individuals for personal
or household purposes to meet their short to medium term

requirements. It comprises loans for consumer durables,
lifestyle products and digital products, personal loans,
auto loans for new and used cars, two-wheeler loans and
gold loans.

Enterprise Loans

HDBFSL offers loans to businesses for their growth and
working capital requirements. Various loans offered to
enterprises include: Unsecured Business Loan, Enterprise
Business Loan, Loan Against Property, Loan Against
Securities. These loans cater to the financial requirements of
enterprises for the purchase of new machinery, inventory or
revamping the business.

Asset Finance

HDBFSL provides loans for the purchase of new and used
commercial vehicles and provides refinance against existing
vehicles for business working capital. It extends these
offerings to fleet owners, first-time users, first-time buyers
and captive use buyers. Construction equipment loans are
offered for the procurement of new and used construction
equipment. The company also facilitates refinancing on
existing equipment. HDBFSL also offers customised tractor
loans for the purchase of tractors or tractor-related implements
to meet both agricultural and commercial needs.

Micro Lending

HDBFSL offers micro-loans to borrowers through the Joint
Liability Group (JLG) framework to empower and promote
financial inclusion for sustainable development.

These loans were initiated in 2019 and are currently available in
seven states including Maharashtra, Bihar, Rajasthan, Gujarat,
Madhya Pradesh, Uttar Pradesh, Odisha and Tamil Nadu
covering 144 districts with more than 269 operational branches.

Fee-Based Products / Insurance Services

HDBFSL has a licence from the Insurance Regulatory and
Development Authority of India (IRDAI) and is a registered
Corporate Insurance Agent certified to sell both life and
general (non-life) insurance products. The company has tie-
ups with HDFC Life Insurance Company Limited and Aditya
Birla Sun Life Insurance for life insurance products. HDBFSL
has partnered with HDFC ERGO General Insurance Company
Ltd, Tata AIG General Insurance Company Ltd and Go Digit
General Insurance for general insurance products.

The BPO service offerings include running collection call
centres, sales support services, back office operations and
processing support services. Under collection services,
HDBFSL has a contract to run collection call centres for
HDFC Bank. These centres provide collection services for
the entire range of HDFC Bank's retail lending products
offering comprehensive end-to-end collection services. Under
back office and sales support, HDBFSL offers sales support
and back-office services like forms processing, document
verification, finance and accounting operations and processing
support for HDFC Bank.

Digital Presence

HDBFSL’s presence across digital channels enables it to offer
a wide range of financial solutions to its customers. They can
access and manage their loan account 24/7 through its new,
upgraded version of Mobile Banking Application HDB-On-
the-Go with enhanced features, customer Service Portal to
manage the loan account, missed call service, WhatsApp
Account Management and the Chatbot #AskPriya.

HDFC ERGO General Insurance Company Limited
(HDFC ERGO)

HDFC ERGO General Insurance Company Limited (HDFC
ERGO), is a subsidiary of HDFC Bank. It offers a comprehensive
bouquet of general insurance products - such as Health,
Motor, Travel, Home, Personal Accident and Cyber Insurance
to its retail customers. It also offers products like Property,
Engineering, Marine and Liability Insurance to its SME &
Corporate Customers. For Rural Customers it offers Crop and
Cattle Insurance.

HDFC ERGO has a track record of consistent profitable
growth. Over the past 17 years, it has grown faster than the
industry - with a 28 per cent CAGR vis-a-vis 15 per cent CAGR
for the General Insurance industry. As a result, HDFC ERGO
has improved its market share from 0.8 per cent in FY08 to
5.1 per cent in FY2025.

Profit After Tax for the year ended March 31, 2025 stood at
' 500 crore as compared to ' 438 crore for the year ended
March 31, 2024.

Distribution Network

HDFC ERGO has a pan-India presence and a multi-channel
distribution network. This enables it to provide its customers
flexibility while availing its products and services.

Riding on the motto of ‘Customer First', HDFC ERGO has
a comprehensive distribution network of over 1,20,000
individual agents including Point of Sales Personnel (POSPs),
177 Banks / Corporate Agents and over 600 brokers with 299
offices and over 600 digital offices spread across the country,
enabling it to ‘Insure More, Serve More, Reach More'.

Product Segments

Accident & Health Insurance: As an important stakeholder in
building a ‘Healthy India', HDFC ERGO offers various products
under Accident & Health Insurance - retail health insurance
to those seeking individual or family floater health insurance
plans, group health insurance to insured groups, top-up health
insurance to those who seek to protect themselves from high
medical expenses, mass health insurance to those interested
in participating in Government schemes. The Company is the
fourth largest retail health insurer in the industry as of March
31,2025.

Commercial Business: HDFC ERGO has a track record
of providing customised insurance solutions to its corporate
clients. Be it property, engineering insurance, marine insurance
or liability insurance, the Company follows an advisory
approach to its clients based on a thorough understanding of
their requirement. It is the fourth largest insurer in the private
sector in the Commercial segment in the Financial Year 2024¬
25.

Motor Insurance: HDFC ERGO offers motor insurance for
various segments - private cars, two wheelers, passenger
vehicles, commercial vehicles, electronic vehicles as well as
new and old vehicles.

Rural and Agri Business: HDFC ERGO's rural market
development activities are spearheaded by crop insurance
covering a large agrarian population which is frequently
affected by crop losses attributable to an irregular climatic
pattern. It is the second largest insurer in the private sector
in the crop insurance segment in FY2025. HDFC ERGO also
supports deepening insurance penetration in rural India via its
Common Service Centre (CSC) channel.

Servicing

The Company continues to invest in developing robust digital
capabilities supported by Artificial Intelligence. Be it unique
insurance products, integrated customer service models, top
in-class claim processes or a host of technologically innovative
solutions, the Company strives to consistently enhance the
customer / partner experience. It has ISO certified processes
for Claims, Operations, Customer Services, Business
Continuity Management System and Information Security
Management System.

HDFC ERGO has a fair and robust claims management
practice. The Company provides prompt response and quick
claim settlement and equity of treatment to all its stakeholders,
through its wide network of motor workshops and empanelled
hospitals across the country. Customers are able to view and
track claims status and provide feedback through HDFC
ERGO's website and mobile application thus bringing in
transparency. Over 47 per cent of motor insurance claim
surveys were conducted digitally in FY2025. About 92 per
cent of motor insurance claims and about 69 per cent of health
insurance claims were settled in cashless mode in FY2025.

HDFC ERGO issued more than 3.4 crore policies in FY2025, of
which about 92 per cent were issued digitally. The Company
has enabled multilingual support across digital platforms to
service the customers in their preferred language. It Introduced
“1UP”, an AI-driven application that provides advisors with AI-
powered contextual prompts for sales, retention, and daily
planning, optimising their workflow. It also embedded an
AI-enabled inspection technology on its WhatsApp chatbot,
which allows the customers instant motor claim settlement
feature for minor damages like dents, scratches among others.
In line with its customer centric philosophy, the Company's
grievance resolution TAT is lower than industry average by
about 5 days.

HDFC ERGO's Here app is a one-of-a-kind ecosystem which
aims to address consumers' anxiety and provide convenience
towards healthcare & mobility needs and helps them save
cost on their daily healthcare and vehicles expenses. The app
is free for use by all, irrespective of whether or not one is an
HDFC ERGO policyholder, and has been well received, as
evident by over 70 lakh downloads since launch. The app also
includes features to help people manage their cyber and pets
related requirements.

The Company continues to invest in developing robust
digital capabilities to ensure long-term success in the digital
landscape. Its transition of the policy administration system
to Duck Creek marks a significant stride towards future
readiness and unlocking growth. The new core system
facilitates dynamic product configuration, expediting product

launches and enabling swift deployment of niche offerings and
embedded insurance journeys.

HDFC ERGO continues to be future-ready by innovating and
focusing on new-age technologies like AI, VR, Robotics, etc.
to continue to provide superior customer experience.

ESG

HDFC ERGO believes in building a sustainable ecosystem
to ensure it can continue providing value to its customers
and society at large. It has developed an ESG policy and
framework, and has been undertaking a number of initiatives
across Environmental and Social aspects and further
strengthening its Governance related processes.

As an example, Diversity, Equity and Inclusion (DEI) is a key
part of the Company's culture and embedded in various
processes. The share of women in overall workforce has
improved from 19 per cent in FY22 to 27 per cent in FY2025.

HDFC Asset Management Company Limited (HDFC
AMC)

Established in 1999, HDFC AMC offers a comprehensive
suite of mutual fund and alternative investments across asset
classes, including equity, fixed income, hybrid and multi-asset
solutions. These offerings are available on both active and
passive platforms, catering to a broad and diverse customer
base. As of March 31,2025, HDFC Bank held a 52.47 per cent
stake in HDFC AMC.

As the investment manager to HDFC Mutual Fund - one of
India's leading mutual funds - HDFC AMC reported a closing
AUM of over ' 7,54,453 crore, representing a market share
of 11.5 per cent as on March 31, 2025. It serves over 1.32
crore unique investors through 2.33 crore live accounts. With a
strong nationwide presence across 280 offices and a network
of over 95,000 distribution partners, HDFC AMC is further
enabled by modern digital platforms, ensuring broad and
efficient access for clients across India.

Additionally, the company has a wholly owned subsidiary
company - HDFC AMC International (IFSC) Limited in Gujarat
International Finance Tec-City (GIFT City) offering investment
management, advisory and related services.

HDFC Securities Limited (HSL)

HDFC Securities Limited surpassed a key milestone of 25 years
of existence in April 2025. The company has demonstrated a
strong financial performance over the years underscored by
a 31 per cent CAGR in total income and a 24 per cent CAGR
in profit after tax, both over the last five years. As one of the
long-standing bank-based stockbrokers and a key subsidiary
of HDFC Bank, HDFC Securities Ltd. (HSL) leverages real¬
time, data-driven insights and research-backed information to
empower investors. HSL serves 68 lakh customers, offering a
comprehensive range of investment and protection products.
HSL's distribution footprint stood at 134 branches across 106
cities/towns as of March 31,2025. Approximately, 96 per cent
of its customers accessed its services digitally. HSL's ranking
in NSE active clients has improved to the 6^th position with
15.25 lakh customers from the 7^th position last year.

HDFC Bank held a 94.5 per cent stake in HDFC Securities
Ltd. (HSL) as of March 31, 2025. Total equity raised, pursuant
to the rights issue in fiscal 2025 aggregated to ' 996 crore.

In FY 2024-25, HSL achieved a total income of ' 3,265 crore,
reflecting a 23 per cent increase from ' 2,661 crore in the
previous financial year. Net revenue (total income less finance
costs) aggregated to ' 2,479 crore in the year ended March
31, 2025, a 20 per cent year-on-year increase. Operating
expenses were ' 983 crore, resulting in a cost-to-revenue ratio
of 39.7 per cent. PAT for fiscal 2025 was ' 1,125 crore marking
an 18 per cent rise year-on-year, and registering an earnings
per share of ' 638. The average margin trading funding (MTF)
portfolio increased significantly by 50 per cent year-on-year to
' 8,343 crore, while equity trade volumes grew by 24 per cent
year-on-year to ' 8 lakh crore.

HSL launched its wealth advisory platform viz., HDFC TRU,
in fiscal 2025. It has an aggregate of ' 10,000 crore assets
under management. During the year under review, HSL has
incorporated a Wholly Owned Subsidiary namely HDFC
Securities IFSC Limited (HSIL) in the GIFT City-Gujrat.

India's financial markets in FY2025 reflected a clear duality-
marked by strong domestic investor participation in the
first half, followed by a more subdued second half due to
weaker corporate earnings, rupee depreciation, and global
risk aversion. Foreign capital outflows also added to market

volatility during this period. This economic environment created
a stark contrast in market performance, with the strong gains
achieved in the first half of the fiscal year largely erased in the
second half, though a late recovery helped the Nifty 50 close
with a modest 5 per cent annual gain.

I Other Statutory Disclosures

Number of Meetings of the Board, attendance and
constitution of various Committees

During FY 2024-25 the Board met 14 (Fourteen) times. The
details of Board Meetings held during the year, attendance
of Directors at the Meetings and constitution of various
Committees of the Board are included separately in the Report
on Corporate Governance.

Annual Return

In accordance with the provisions of Companies Act, 2013
(“Act”), the Annual Return of the Bank in the prescribed Form
MGT-7 for FY 2024-25 is available on the website of the Bank
at https://www.hdfcbank.com/personal/about-us/investor-
relations/annual-report.

Requirement for maintenance of cost records

The cost records as specified by the Central Government
under Section 148(1) of the Act, are not required to be
maintained by the Bank.

Details in respect of frauds reported by auditors
under Section 143(12)

Pursuant to Section 143(12) of the Act and circular issued
by National Financial Reporting Authority on Statutory
Auditors' Responsibilities in relation to fraud in a company dated
June 26, 2023, there were 2 (Two) instances of fraud
committed during FY 2024-25, by the employees of the Bank
and reported by the Statutory Auditors to the Audit Committee.
Details of the frauds are as under:

Directors’ Responsibility Statement

Pursuant to Section 134(3)(c) and Section 134(5) of the Act,

and based on the information provided by the Management,

the Board of Directors hereby confirm that:

•    In the preparation of the annual accounts, the applicable
accounting standards have been followed along with
proper explanation relating to material departures;

•    Accounting policies have been selected and applied
consistently. Reasonable and prudent judgments
and estimates have been made so as to give a true
and fair view of the state of affairs of the Bank as at
March 31, 2025 and of the profit of the Bank for the year
ended on that date;

•    Proper and sufficient care has been taken for the
maintenance of adequate accounting records
in accordance with the provisions of the Act, for
safeguarding the assets of the Bank and for preventing
and detecting fraud and other irregularities;

•    The annual accounts have been prepared on a going
concern basis;

•    I nternal financial controls have been laid down to be
followed by the Bank and such internal financial controls
are adequate and operating effectively; and

•    Systems to ensure compliance with the provisions of
all applicable laws are in place and such systems are
adequate and operating effectively.

Compliance with Secretarial Standards

The Bank has complied with Secretarial Standards on Meetings
of the Board of Directors (SS-1) and General Meetings (SS-2)
issued by the Institute of Company Secretaries of India.

Statutory Auditors

The Members of the Bank at the 28^th Annual General Meeting
held on July 16, 2022 had approved the appointment of
M/s. Price Waterhouse LLP, Chartered Accountants (ICAI
Firm Registration No. 301112E/E300264) [“PW”], as the Joint
Statutory Auditors of the Bank for a period of 3 (Three) years
from FY 2022-23 till (and including) FY 2024-25. Further, the
Members of the Bank at the 30^th Annual General Meeting
held on August 9, 2024 had approved the appointment of
M/s. Batliboi & Purohit, Chartered Accountants (ICAI Firm
Registration No. 101048W) [“B&P”] as the Joint Statutory
Auditors of the Bank for a period of 3 (Three) years from
FY 2024-25 till (and including) FY 2026-27.

In view of the completion of term of PW, the Board of Directors
based on the recommendation of the Audit Committee has
vide its resolution dated June 20, 2025 recommended the
appointment of M/s. B S R & Co. LLP (ICAI Firm Registration
No. 101248W/W-100022) [“BSR”] as the Joint Statutory
Auditors of the Bank for a period of 3 (Three) years from
FY 2025-26 till (and including) FY 2027-28, subject to approval
of the Members at the ensuing Annual General Meeting
(“AGM”).

The said appointment shall also be subject to approval of
Reserve Bank of India (“RBI”) every year. Accordingly, RBI vide
its letter dated May 16, 2025 has approved the appointment
of BSR as the Joint Statutory Auditors of the Bank along with
B&P for FY 2025-26.

The resolution in this regard is being proposed at the ensuing
AGM for approval of the Members.

During the year ended March 31, 2025, the fees paid to
PW and B&P (“Joint Statutory Auditors”) as well as their
respective network firms, on aggregated basis, are as follows:

*No fees were paid to network firms of Joint Statutory Auditor(s)
by the Bank.

The aggregate fees paid to Joint Statutory Auditors were
within the limits approved by the Audit Committee.

Corporate Social Responsibility

The composition of CSR & ESG Committee, brief outline of
the CSR policy of the Bank and the initiatives undertaken by
the Bank on CSR activities during FY 2024-25 are set out in
Annexure 2 to this report in the format prescribed in Companies
(Corporate Social Responsibility Policy) Rules, 2014.

The CSR & ESG Committee confirms that the implementation
and monitoring of the CSR Policy was done in compliance with
the CSR objectives and policy of the Bank.

The Bank's CSR Policy & Environmental Social & Governance
(ESG) Policy Framework are available on the Bank's website
at https://www.hdfcbank.com/personal/about-us/corporate-
governance/codes-and-policies.

Particulars of Contracts or Arrangements with
Related Parties

There were no contracts or arrangements entered into with
related parties referred to in Section 188(1) of the Act during
FY 2024-25 and hence Form AOC-2 as required under
Rule 8(2) of the Companies (Accounts) Rules, 2014, is
not enclosed.

Further, the Policy on Related Party Transactions of the Bank
(“RPT Policy”) ensures that the related party transactions are
based on principles of transparency and arm's length pricing.
RPT Policy outlines the basis on which the materiality of related
party transactions will be determined and the manner of dealing
with the related party transactions by the Bank. Pursuant to
SEBI (Listing Obligations and Disclosure Requirements) (Third
Amendment) Regulations, 2024, the RPT policy was amended
to align it with all the applicable amendments.

RPT Policy is available at https://www.hdfcbank.com/personal/
about-us/corporate-governance/codes-and-policies.

Further, the Directors / Key Managerial Personnel who are
interested in the related party transaction(s) do not participate
in the discussion / abstain from voting on the said matter at
Board / Audit Committee meetings. The Bank has engaged
M/s. Vinod Kothari & Company as external consultant
to advise the Bank on related party transactions and
related compliances.

Particulars of Loans, Guarantees or Investments

Pursuant to applicable provisions of Section 186 of the Act,
the particulars of investments made by the Bank are disclosed
in Note no. 9 of Schedule 18 of the standalone financial
statements as per the applicable provisions of the Banking
Regulation Act, 1949.

Material Development

There were no material developments / changes / commitments
affecting the financial position of the Bank which occurred
after March 31, 2025 till the date of this Report.

Financial Statements of Subsidiaries and Associates

In terms of Section 134 of the Act read with Rule 8(1) of
the Companies (Accounts) Rules, 2014, the highlights of
the performance of the Bank's subsidiaries & entity over
which control is exercised and their contribution to overall
performance of the Bank during FY 2024-25 are enclosed

as Annexure 3 to this Report. The Bank does not have any
associate companies or other joint venture companies.

Pursuant to amalgamation of HDFC Limited with and into
the Bank and conditions as stipulated by RBI, on October
18, 2024, the Bank sold 18,20,00,000 equity shares of face
value of ' 10 each of Edu Voyage Education Private Limited
(formerly known as HDFC Education and Development
Services Private Limited) (“Edu Voyage”), corresponding to
91% of its paid-up share capital, to Vama Sundari Investments
(Delhi) Private Limited (“Vama Sundari”). Accordingly, Edu
Voyage ceased to be a subsidiary of the Bank with effect from
October 18, 2024. Further, on December 20, 2024, the Bank
completed the sale of balance 1,80,00,000 equity shares of
face value of ' 10 each of Edu Voyage, corresponding to 9% of
paid-up share capital of Edu Voyage to Vama Sundari.
Accordingly, as on March 31, 2025, the Bank does not have
any shareholding in Edu Voyage.

HDFC Securities Limited (“HSL”), a subsidiary of the Bank,
incorporated a wholly owned subsidiary, namely “HDFC
Securities IFSC Limited” on October 1, 2024. Accordingly,
HDFC Securities IFSC Limited has become a step down
subsidiary of the Bank with effect from October 1, 2024.

Further, during FY 2024-25, the Bank made the following
investments in its subsidiaries:

•    I n April 2024, pursuant to the rights issue of HSL, the
Bank was allotted 16,13,176 equity shares amounting to
' 9,53,22,56,984. The Bank held 94.55% shareholding
in HSL as on March 31, 2025.

•    I n August 2024, pursuant to the rights issue of HDFC
ERGO General Insurance Company Limited (“HDFC
ERGO”), the Bank was allotted 44,20,598 equity shares
amounting to ' 2,89,10,71,092. The Bank held 50.33%
shareholding in HDFC ERGO as on March 31, 2025.

•    I n accordance with the Employee Stock Option Plan
2021 of HDFC Capital Advisors Limited (“HCAL”), the
Bank acquired 69,330 equity shares of HCAL amounting
to ' 67,47,19,560 from the employees of HCAL. The
Bank held 89.34% shareholding in HCAL as on March
31, 2025.

In accordance with the provisions of Section 136 of the Act,
the Integrated Annual report of the Bank including the annual
financial statements and related documents of the Bank's
subsidiary companies are placed on the website of the Bank.

Disclosure under Foreign Exchange Management
Act, 1999 (“FEMA”)

During FY 2024-25 the Bank has complied with the applicable
provisions of FEMA with respect to downstream investments
made by it. Further, as required under the Foreign Exchange
Management (Non-Debt Instruments) Rules, 2019, the
Bank has obtained a certificate from M/s. Batliboi & Purohit,
Chartered Accountants, one of the Joint Statutory Auditors of
the Bank, to this effect.

Whistle Blower Policy / Vigil Mechanism

The Bank encourages an open and transparent system of
working and dealing amongst its stakeholders.

While the Bank's “Code of Conduct & Ethics Policy” directs
employees to uphold Bank values and conduct business
worldwide with integrity and highest ethical standards,
the Bank has also adopted a “Whistle Blower Policy”
(“WB Policy”) to encourage and empower the employees /
stakeholders to make or report any Protected Disclosures
as defined under WB Policy, without any fear of reprisal,
retaliation, discrimination or harassment of any kind.

WB Policy has also been put in place to provide a mechanism
through which adequate safeguards can be provided against
victimization of employees who avail this mechanism.
WB Policy covers and is applicable to the Protected
Disclosures related to violation / suspected violation of the
Code of Conduct including:

(a)    breach of applicable law;

(b)    f raud / criminal offence or corruption / misuse of office
to obtain personal benefit / pecuniary advantage for self
or any other person;

(c)    leakage / suspected leakage of unpublished price sensitive
information which are in violation of SEBI (Prohibition of
Insider Trading) Regulations, 2015 and internal code of
the Bank i.e. Share Dealing Code of the Bank;

(d)    wilful data breach and / or unauthorized disclosure of
Bank's proprietary data including customer data.

WB Policy does not cover the following types of complaints
which if made, is not considered as Protected Disclosure
under WB Policy:

(a)    Matters relating to personal grievances on issues such as
appraisals, compensation, promotions, rating, behavioral
issues / concerns of the manager(s) / supervisor(s) /
other colleague(s), complaint of sexual harassment at
workplace, etc. for which alternate internal redressal
mechanisms in the Bank are in place.

(b)    Matters which are pending before a court of law, tribunal,
other quasi- judicial bodies or any governmental authority.

(c)    Anonymous / pseudonymous complaints will not be
considered as Protected Disclosures under this Policy.

All Protected Disclosures made under WB Policy are made to
the Whistle Blower Committee through the following modes:

(a)    By letter in a closed / sealed envelope addressed to the
Whistle Blower Committee, or

(b)    by submission of the same on the information portal of
the Bank, or

(c)    by way of an email addressed to whistleblower@
hdfcbank.com. In exceptional circumstances, the Whistle
Blower may make such Protected Disclosures directly to
the Chairperson of the Audit Committee of the Board.

All Protected Disclosures received under WB Policy are
examined by the Whistle Blower Committee and the
investigation is further assigned to an appropriate investigating
Officer(s) depending on the nature of the subject matter of the
Protected Disclosure.

Details of whistle blower complaints received and subsequent
action taken and the functioning of the whistle blower
mechanism are reviewed periodically by the Audit Committee.
During FY 2024-25, a total of 97 such complaints were
received and taken up for investigation which has resulted in
certain staff actions in 41 cases, post investigation. The broad
categories of whistle blower complaints were in the areas of
misappropriation of Bank / customer funds, forgery related
cases, improper business practices and corruption.

WB Policy is available on the website of the Bank at
https://www. hdfcbank.com/personal/about-us/corporate-
governance/codes-and-Dolicies.

Statement on Declaration by Independent Directors

Mr. Atanu Chakraborty, Mr. M. D. Ranganath, Mr. Sandeep
Parekh, Dr. (Mrs.) Sunita Maheshwari, Mrs. Lily Vadera,

Dr. (Mr.) Harsh Kumar Bhanwala and Mr. Santhosh Keshavan
are the Independent Directors on the Board of the Bank as
on March 31, 2025.

The Independent Directors have submitted declarations
that each of them meets the criteria of independence as
provided in Section 149(6) of the Act, along with the Rules
framed thereunder and Regulation 16(1)(b) of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015.

During FY 2024-25 there has been no change in the
circumstances affecting their status as Independent Directors
of the Bank. In the opinion of the Board, the Independent
Directors possess the requisite integrity, experience, expertise,
skills, and proficiency required under all applicable laws and
the policies of the Bank.

Evaluation of Board of Directors

The performance evaluation of the Board, its Committees
and the individual members of the Board (including the
Part-Time Chairman) for FY 2024-25, was carried out internally
pursuant to the framework laid down by the Nomination and
Remuneration Committee (“NRC”). A questionnaire for the
evaluation of the Board, its Committees and the individual
members of the Board (including the Part-Time Chairman),
covering various aspects of the performance of the Board and its
Committees, including composition, roles and responsibilities,
board processes, boardroom culture, adherence to Code of
Conduct and Ethics, quality and flow of information, as well
as measurement of performance in the areas of strength as
identified in the previous board evaluation, was sent out to
the Directors. The Committees were evaluated inter-alia on
parameters such as composition, terms of reference, quality
of discussions, contribution to Board decisions and balance
of agenda between the Committees and the Board.

The responses received to the questionnaires on evaluation
of the Board, its Committees and Non-Independent Directors
were then placed before the meeting of the Independent
Directors for consideration. The assessment of performance
of Non-Independent Directors on personal and professional
attributes was also carried out at the meeting of Independent
Directors. The assessment of performance of the Independent
Directors on the Board (including Chairman) was subsequently
discussed at the Board meeting. In addition to the above
parameters, the Board evaluated and was satisfied that the
Independent Directors of the Bank fulfill the independence
criteria as specified in SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 and was independent from
the management.

The Board of Directors complimented the improved effective
oversight on the group entities. Other areas such as code of
conduct, board processes, board composition and boardroom
culture demonstrated the best corporate governance
practices adopted by the Bank. The Board appreciated the
independent and transparent discussion at the meetings.
The Board noted that it has been dedicating significant time
in Strategic planning, Competitive positioning, Benchmark,
talent management & Succession planning and the same will
continue. The Board further realised the need to focus more on
Gen AI and Cyber Security aspect considering that the same
has become increasingly important. The Board also noted that
while there has been positive development in the areas of focus
identified in the previous evaluation, efforts need to continue in
that direction. The appropriate feedback was conveyed to the
Board members on their respective evaluation.

Policy on Appointment and Remuneration of
Directors and Key Managerial Personnel

The Bank has in place a Policy for appointment and fit and
proper criteria for Directors of the Bank. This Policy lays down
the criteria for identification of persons who are qualified as
‘fit and proper' to become Directors such as academic
qualifications, competence, track record, integrity, relevant
skills, etc. which shall be considered by the Nomination and
Remuneration Committee (“NRC”) while recommending the
appointment of proposed candidate as a Director of the Bank.

This Policy also deals with the process for re-appointment of
directors, annual affirmations, familiarization programme for
Non-Executive Directors (“NEDs”), etc. and is available on the
website of the Bank at https://www.hdfcbank.com/personal/
about-us/corporate-governance/codes-and-policies.

The remuneration of all employees of the Bank, including
Whole Time Directors, Material Risk Takers, Key Managerial
Personnel, Senior Management and other employees is
governed by the Compensation Policy of the Bank. The same
is available at the https://www.hdfcbank.com/personal/about-
us/corporate-governance/codes-and-policies.

The Compensation Policy of the Bank, duly reviewed and
recommended by the NRC has been articulated in line with
the relevant Reserve Bank of India guidelines.

The Bank's Compensation Policy is aimed to attract, retain,
reward and motivate talented individuals critical for achieving
strategic goals and long-term success. The Compensation
Policy is aligned to business strategy, market dynamics,
internal characteristics and complexities within the Bank. The

ultimate objective is to provide a fair and transparent structure
that helps the Bank to retain and acquire the talent pool critical
to build competitive advantage and brand equity.

The Bank's approach is to have a “pay for performance”
culture based on the belief that the performance management
system provides a sound basis for assessing performance
holistically. The compensation system also takes into account
factors such as roles, skills / competencies, experience and
grade / seniority to differentiate pay appropriately on the basis
of contribution, expertise and availability of talent on account
of competitive market forces. The details of the Compensation
Policy are also included in Note No. 18 of Schedule 18 forming
part of the standalone financial statements.

During FY 2024-25 based on the recommendation of the
NRC, the Compensation Policy of Bank was reviewed by the
Board of Directors and necessary changes were made to
the policy with respect to addition of clauses pertaining to
‘Special Payouts' and inclusion of ‘Guidelines to grant LTI to
New Joiners'.

The NEDs including Independent Directors are paid
remuneration by way of sitting fees for attending meetings of
the Board and its Committees, which are determined by the
Board based on applicable regulatory guidelines / circulars.

Further, expenses incurred by them, if any, for attending
meetings of the Board and Committees in person are
reimbursed at actuals. Pursuant to the relevant RBI guidelines
and approval of the Members, the NEDs including Independent
Directors, are paid fixed remuneration as detailed in the Report
on Corporate Governance.

The following Directors of the Bank are also the director(s) of
the Bank's subsidiaries / step down subsidiaries as on the
date of this report:

Note: As per the Bank’s Policy, no sitting fees were paid to the Executive
Director(s) of the Bank nominated on the board of its subsidiary/ step
down subsidiary.

Succession Planning

The NRC and Board reviews succession planning and
transitions at the Board and Senior Management level. The

Board composition and the desired skill sets / areas of expertise
at the Board level are continuously reviewed and vacancies,
if any, are reviewed in advance through a systematic process.

Succession planning at Senior Management level, including
business and assurance functions, is continuously reviewed
to ensure continuity and depth of leadership at two levels
below the Managing Director. Successors are identified prior
to the Senior Management positions falling vacant, to ensure
a smooth and seamless transition.

Succession planning is a continuous process which is
periodically reviewed by NRC and the Board.

Significant and Material orders passed by Regulators

There are no significant and material orders passed by the
regulators or courts or tribunals impacting the going concern
status and operations of the Bank in the future.

Directors and Key Managerial Personnel

In compliance with Section 152 of the Act and the Articles of
Association of the Bank, Mr. Kaizad Bharucha and Mrs. Renu
Karnad will retire by rotation at the ensuing AGM and are eligible
for re-appointment. The resolutions for their re-appointment
are being proposed at the ensuing AGM for the approval of
the Members. A brief profile of Mr. Bharucha and Mrs. Karnad
is furnished elsewhere in the Integrated Annual Report and
Notice of the AGM for the information of the Members.

During FY 2024-25 following were the changes in composition
of the Board of Directors and Key Managerial Personnel of
the Bank:

1.    Re-appointment of Mr. Atanu Chakraborty
(DIN: 01469375) as the Part-Time Chairman and
Independent Director of the Bank for a period of 3 (Three)
years with effect from May 5, 2024 to May 4, 2027 (both
days inclusive), not liable to retire by rotation, as approved
by RBI and the Members through Postal Ballot on May
3, 2024;

2.    Appointment of Mr. Santhosh Keshavan
(DIN: 08466631) as an Independent Director of the
Bank for a period of 3 (Three) years with effect from
November 18, 2024 to November 17, 2027 (both days
inclusive), not liable to retire by rotation, as approved by the
Members through Postal Ballot on January 11,2025;

3.    Resignation of Mr. Santosh Haldankar (ICSI Membership
No.: A19201) as the Company Secretary and Compliance
Officer of the Bank effective from July 20, 2024 (close of
business hours); and

4. Appointment of Mr. Ajay Agarwal (ICSI Membership
No.: F9023) as the Company Secretary and Compliance
Officer of the Bank with effect from July 21,2024.

All the Directors of the Bank have confirmed that they satisfy
the fit and proper criteria as prescribed under the applicable
regulations and that they are not disqualified from being
appointed as Directors in terms of Section 164(2) of the Act.

Particulars of Employees

In accordance with the provisions of Section 197(12) of the
Act read with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, the
requisite details are set out in Annexure 4 to this Report.

Further, the statement containing particulars of employees as
required under Section 197(12) of the Act read with Rule 5(2) and
Rule 5(3) of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014, is given in an Annexure
and forms part of this Report. In terms of Section 136(1) of
the Act, the Integrated Annual Report including the financial
statements are being sent to the Members excluding the
aforesaid Annexure. The Annexure is available for inspection
and any Member interested in obtaining a copy of the Annexure
may write to the Company Secretary of the Bank.

Compliance on Maternity Benefit Act, 1961

The Bank has complied with the applicable provisions of
Maternity Benefit Act, 1961 for female employees of the Bank
with respect to leaves and maternity benefits thereunder.

Conservation of Energy and Technology Absorption

Please refer to page nos. 119 to 120 and 125 of this Integrated
Annual Report for information on Conservation of Energy and
page no. 228 of this Integrated Annual Report for information
on Technology Absorption.

Foreign Exchange Earnings and outgo

During the year, the total foreign exchange earned by the
Bank was ' 4,919.04 crore (on account of net gains arising
on all exchange / derivative transactions) and the total foreign
exchange outgo was ' 4,092.04 crore towards the operating
and capital expenditure requirements.

Secretarial Audit

In terms of Section 204 of the Act and the Rules made
thereunder, M/s. BNP & Associates, Company Secretaries,
(ICSI Firm Registration No. P2014MH037400), were appointed

as Secretarial Auditors of the Bank for FY 2024-25. The report
of Secretarial Auditors is enclosed as Annexure 5 to this
Report. There are no qualifications, reservations or adverse
remarks in the report of the Secretarial Auditors.

Further, the Audit Committee and the Board of Directors of
the Bank at their respective meetings held on April 12, 2025
and April 19, 2025 have recommended the appointment of
M/s. Bhandari & Associates, Practicing Company Secretaries
(ICSI Firm Registration No. P1981MH043700), as Secretarial
Auditors of the Bank at an overall audit fees of Rs. 15,00,000
(Rupees Fifteen Lakh Only) per annum in addition to out of
pocket expenses, outlays and taxes as applicable, to conduct
secretarial audit of the Bank for a period of 5 (Five) years i.e.
from FY 2025-26 till (and including) FY 2029-30.

The resolution in this regard is being proposed at ensuing
AGM for approval of the Members.

Corporate Governance

In compliance with applicable provisions of SEBI Listing
Regulations, a separate report on Corporate Governance
along with a certificate of compliance from the Secretarial
Auditors, forms an integral part of this Annual Report.

Business Responsibility and Sustainability Report

The Bank's Business Responsibility and Sustainability Report
forms an integral part of this Report.

Prevention, Prohibition and Redressal of Sexual
Harassment of Women at the Workplace

The relevant information is included in the Report on
Corporate Governance.

Customer complaints and grievance redressal

Details of customer complaints and grievance redressal is
enclosed as Annexure 6 to this Report.

Unclaimed Deposits of HDFC Limited

The Bank is a private sector bank registered with RBI and in
terms of applicable RBI norms, deposits remaining unclaimed /
unpaid for a period of 10 (Ten) years, need to be transferred by
the Bank to Depositor Education and Awareness (DEA) Fund
maintained by RBI.

In accordance with applicable provisions of the Act read with
Investor Education and Protection Fund Authority (Accounting,
Audit, Transfer and Refund) Rules, 2016, as amended, HDFC
Limited, has transferred deposits remaining unclaimed for a
period of 7 (Seven) years upto June 30, 2023, to the Investor
Education and Protection Fund (IEPF) established by the
Central Government. The deposit holders of HDFC Limited
can claim their respective unclaimed deposits from IEPF. The
process of claiming the deposits from IEPF is uploaded on
the website of the Bank. Post merger of HDFC Limited with
and into the Bank i.e. effective July 1, 2023, the Bank has
been transferring all the unclaimed deposits of HDFC Limited
(remaining unclaimed for more than 10 years) to the DEA Fund.

Acknowledgement

The Directors of the Bank would like to place on record their
gratitude towards the guidance and co-operation received
from the Reserve Bank of India, Securities and Exchange
Board of India, Stock exchanges, Ministry of Corporate
Affairs and other Government and Regulatory Agencies. The
Directors of the Bank would like to take this opportunity to
express their appreciation for the hard work and dedicated
efforts put in by the Bank's employees and look forward to
their continued contribution.

Conclusion

After two years of the merger, the integration of HDFC
Limited's home loan expertise with HDFC Bank's extensive
scale and reach has strengthened our position as a
leading financial institution. The merger has resulted in
a much stronger Bank that is now poised to capitalise
further on the growth opportunities in the market.
In FY 2024-25, the Bank reported healthy growth while
maintaining pristine asset quality. There is immense
opportunity for offering banking services in India as the
economy grows. HDFC Bank is well positioned to capitalise
on this due to its strong balance sheet as well as established
brand name. While pursuing growth, the Bank will not
compromise on high corporate governance standards and
will continue focusing on its five core values: Customer
Focus, Operational Excellence, Product Leadership, People
and Sustainability.

On behalf of the Board of Directors

Atanu Chakraborty    Sashidhar Jagdishan

Part-Time Chairman    Managing Director

and Independent Director and Chief Executive Officer

Place : Mumbai
Date : June 20, 2025