HDFC Bank eyes larger pie of Karnataka rural market

India’s second largest private sector lender HDFC Bank has embarked on an aggressive branch expansion mode, planning to add 40 more branches in Karnataka, taking the total tally to 230 in the State by the end of the financial year, according to a top bank executive.

With this, the bank will grow its network in Karnataka by 35 per cent, this year. Currently, it has 191 branches across 30 districts and over 1000 ATMs in the state. Most of the new branches will have ATMs.

Talking to Deccan Herald, HDFC Bank Senior Executive Vice-President and Branch Banking Head Dhiraj Relli said, “We have been very aggressive in terms of expanding our footprint in Karnataka. Most of our new branches are in semi-urban and rural locations.

Currently, around 70 branches are in these locations. All our branches, irrespective of their location and size, offer the entire gamut of world class products to our customers. We expect the healthy growth in our branch network to continue.”

To meet its growing need for human resources, the bank expects to add 300-400 employees this year, which will in turn lead to an indirect employment of 150 people.

“The bank has a good presence in terms of retail and wholesale banking, with approximately Rs 30,000 crore in deposits, which are growing at around 11 per cent in the State,” Relli added.

The bank is seeing a growth of 15-20 per cent in home loans and car loans in the State. Retail loans is also showing double digit growth, Relli said.

As of September 30, 2014, the bank’s distribution network was at 3,600 branches in 2,272 cities with 11,515 ATMs across India. At a national level, the number of employees increased from 69,662 as of September 30, 2013, to 75,339 as of September 30, 2014. Overall, the bank has around Rs 3,90,000 crore deposits.

The bank’s customer base ranges from retail to mid-sized businesses and large corporates across IT companies, manufacturing and other sectors. “Most of the corporates and institutions in Bengaluru bank with us,” Relli said.

Speaking about net banking, Relli said that the usage of net and mobile banking in the state is very high. Bengaluru city today ranks the highest in terms of net banking penetration/usage in the country (alongside Mumbai). The city alone accounts for 11 per cent of the net banking users pan-India.

There has been a growth of 20 per cent in absolute net banking users in Bengaluru over the last 2 years.

The Foreign Investment Promotion Board (FIPB) has cleared HDFC Bank’s proposal to raise Rs 10,000 crore. Shareholders in May this year allowed the lender to raise Rs 10,000 crore through routes that may include public or private placement as well as domestic or international markets, the bank said.

On challenges, Relli said, “We hope to see more industries taking root in Karnataka.”  On Tuesday the bank opened its 100th branch in Bengaluru at J P Nagar 5th phase.