hdfc csr strategies

Narsee monjee institue of management studies

HDFC: CSR Case Study End-Term Project

BY-

Group 5

AnkitGoel (22)

AsthaSaith (46)

AbhinavGoel (23)

Hitesh Bhatia (11)

SaurabhTandon (59)

1 HDFC: CSR Case Study

SUSTAINABILITY DEVELOPMENT- HDFC BANK

"We Understand Your World”

1. Introduction

HDFC Bank was incorporated in 1994 by Housing Development Finance Corporation

Limited (HDFC), India's largest housing finance company. It was among the first

companies to receive an 'in principle' approval from the Reserve Bank of India to set up

a bank in the private sector. HDFC, being India’s second largest private bank, has a wide

network of 294 offices catering to over 2,400 towns & cities spread across the country.

The bank deals with three key business segments. - Wholesale Banking Services, Retail

Banking Services, Treasury.

2. Corporate Social Responsibility

At HDFC, 'Corporate Social Responsibility' has always been an evolving concept, akin to

its 'learning by doing' philosophy. CSR is an integral part of its operation and viewed as

commitment to operate ethically and contributing to economic development while

improving the quality of life of its employees as well as that of the local communities

and society at large. It has professionally nurtured each of its social initiative as an

investment, with a special focus on Education and livelihood. The major initiatives taken

by the Bank in this direction over the last few years cover the following areas:

• Education

• Livelihood training and support

• Environmental sustainability

• Employee welfare, health and well being

• Employee engagement

2.1 CSR at Workplace

(a) Human Resource

The bank constantly trains and empowers its 55,752 large workforce through programs

conducted by internal and external faculty. It lists ‘people’ as one of its stated core

values.


(b) Code of Ethics

HDFC strives for honest and ethical conduct, including the ethical handling of actual or

apparent conflicts of interest, full, fair, accurate, timely, and understandable disclosure

in the periodic reports required to be filed by the issuer; and compliance with

applicable governmental rules and regulations across all business functions.1

The Bank adheres to Section 406 of the Sarbanes-Oxley Act of 2002 and the rules and

regulations framed by the Securities and Exchange Commission of USA and other

statutory and regulatory authorities in India and USA. The code is applicable to the

Managing Director (Chief Executive Officer), the Chief Financial Officer and members of

senior management of the Bank.

(c) Complaints Handling

The Bank supports a formalised system for receiving, retaining and treating complaints

received, and procedures for the confidential and anonymous submission by employees.

Under this policy, employees are encouraged to report questionable accounting matters

or any fraudulent financial information provided to shareholders, the government or

the financial markets, or any conduct that results in a violation of law by the Bank or in

a substantial mismanagement of the Bank’s resources, to the management. HDFC also

has a whistle blower policy in place for reporting on any malpractice in the

organization.

2.2 CSR at Market-place

(a) Promoting Financial Awareness

In addition to providing various products and services to its clients, the Bank believes

that imparting education and training to these target segments is equally essential to

ensure transparency and create awareness. Through these programs the Bank provides

credit counselling and information on parameters like saving habits, better utilization of

savings, features of savings products, credit utilization, asset creation, insurance,

income generation program etc.

1http://www.openpages.com/solutions/sarbanes-oxley/sarbanes-oxley-sec406.asp


2HDFC and UTI together lunched an Investor Education Initiative called "Swatantra" on

5th February, 2011 in the states of Kerala, Karnataka and Tamil Nadu. The programme

aimed to create investor awareness about the various financial products and wealth

generation options through mobile phones, internet tools (face book, twitter), financial

calculators and planners, and also other conventional methods. HDFC Bank utilized

huge network of rural and semi-rural branches across Kerala, Karnataka and Tamil

Nadu to interact with millions of people living in rural areas to impart financial

knowledge.

(b) Sustainability Reporting

The bank has engaged consultants to create an in-house capability for triple bottom line

reporting, based on the Global Reporting Initiative guidelines. This is a disclosure tool

used to communicate important information regarding the organization and its

performance across social, environmental, and economic parameters to stakeholders.

(c) Fair Practices Code

This Code is pursuant to the Guidelines issued by the National Housing Bank on Fair

Practices Code for Housing Finance Companies. Major Objectives of this code include

following fair and transparent business practices, encouraging market forces through

fair competition, having cordial relations with its customers.3

• Fair Lending

The bank would ensure timely disbursement of loans sanctioned in conformity

with the terms and conditions governing such sanction. It would give notice of

any change in the terms and conditions including interest rates, service charges

etc.

The bank would not discriminate on grounds of sex, caste and religion in the

matter of lending. However, this does not preclude the bank from participating in

credit-linked schemes framed for weaker sections of society.

In the matter of recovery of loans, the bank would not resort to undue

harassment or use of force.

2http://banking.contify.com/story/uti-mutual-fund-and-hdfc-bank-to-aware-investors-in-south-india-2011-02-

03 3http://www.ncr.com/about_ncr/media_information/news_releases/2010/april/20100420_hdfc.jsp


• Grievance Reddressal

In case of any grievance or complaint, the customers can contact the Grievance

Redressal officer who belongs to the specifically created Grievance Redressal Cell

by HDFC.

2.3CSR at Community4

Shelter Assistance Reserve

Close to 190 social and development initiatives were supported during FY 2010-11

through the Shelter Assistance Reserve. The overall utilisation from the Reserve stood

at Rs. 8.88 crore. The segment-wise break-up of the utilisation is illustrated in the chart

below5:

4http://www.hdfcbank.com/common/pdf/corporate/Bank-Annual-Report-2011-Part1.pdf

5http://www.hdfc.com/others/social_initiatives.asp

http://www.hdfc.com/others/social_initiatives.asp


Table 1

Community development Activities in India

S.No Area Initiative Activities Partnering

organisation

1 Employee Volunteering

Employee participation in summer camps,

English-speaking classes; collection of paper

waste, assistance in academic support

programs, donation of blood.

Other activities Focus on creating self-reliance

and promoting education in the interiors of the

country

2 Payroll Giving

A web portal raises funds and contributions

from individuals across world (including

employees and customers) and directs these

donations to NGOs.

Payroll Giving program already has more than

26,000 donors contributing over Rs. 60 lacs per

month

GiveIndia

3 Community

Development

Save The

Children

Project

Parternership with NGO, Save The Children

focusing on long-term recovery initiatives

including livelihood support and school

rehabilitation of flood victims in Leh.

18 temporary schools were set up at Igoo,

Basgo, Skurbuchan, Phyang and Saspotse with

an aim to reach 24 temporary schools

Save The

Children

4 Arts and

Sports

Folk Arts

Rajasthan

HDFC partnered with Folk Arts Rajasthan to

provide scholarship to children to pursue

higher education and also learn their

traditional Merasi artistic legacy(3), with an aim

to eradicating illiteracy, fostering community

development, and celebrating cultural

understanding.

Folk Arts

Rajasthan,

Lok Kala

SagarSanstha

n (LKSS)

1 Education and

Livelihood

School

Adoption &

Scholarship

A public private partnership to ensure that

children in municipal schools have access to

quality education.

Teachers are also assisted with innovative

teaching methods and learning material.

HDFC Bank is presently supporting seven

schools in Mumbai covering 1,850 children and


10 schools in Pune on a reading program that

covers over 5,000 children.

The bank also supports 1500 girls in Mumbai,

Sheopur and Chattisgarh by providing them

scholarships.

Over 1,000 children in Mumbai, Bangalore,

Hyderabad and Kolkata are being covered

through the Educational assistance program

which aims at reducing the school dropout

rates.

2 Pre-school

counselling

The bank has operated various pre-schools in

areas where drop-out rates are high.

Focus on child’s first generation learning and

counselling of their parents on importance of

education.

The bank currently reaches out to over 9,000

children in Mumbai, Delhi and Hyderabad.

Has tied up with 464 schools in Maharashtra

covering over 69,000 rural children to inculcate

savings habit

3

Livelihood

Training &

Support

Support for vocational training to individuals to

enable them to have regular and sustainable

income

Offers non-formal vocational and technical

education programs in trades such as welding,

plumbing, electrical maintenance, mobile

repair, tailoring, construction, making of paper

bags, gel candles, wax candles, basket weaving,

agarbatti rolling.

An active lending program for customers below

the poverty line through the formation of self-

help groups.

Training programs to the borrowers that

nurture the appropriate skill sets as well as the

provision of market linkages (so that goods are

sold at fair price) to the primary markets in

order to ensure that the livelihood activities are

sustainable.

Counselling to all the self-help groups that it

works with on the benefits of the savings habit,

wise investing habits etc.


The

Bhavishya -

Yaan

Mission

Continuing public private partnership for

overall development of underprivileged

children of Mumbai helping them to shed their

inhabitations and motivate them to move ahead

in life.

Rotary club of

Mumbai,

Municipal

Corporation

of Greater

Mumbai

Running

School for

Tribal

A school was born from the association which

aimed at running schools for tribal children in

the interiors of Maharashtra (district Dahanu).

The school provides free education, stay,

clothing, food and medical treatment for all

students.

The school caters to over 300 children upto Std.

VI and 85% of the students have passed their

exams. HDFC supported the running of this

school for a period of 1 year.

Savarkar

Trust

Running

School for

Rural

children

HDFC partnered this initiative by supporting 10

Single Teacher schools in one block of

Kanchipuram district of Tamil Nadu, which is

engaged in promoting broad-based and cost-

effective education in arithmetic and languages

for under privileged children in rural areas.

Swami

Vivekanand

Society

4

Empowering of

Differently

Abled

Partnered with Chirag for lighting of villages in

Wada Taluka, Thane District, through Solar

energy, by providing them with solar lanterns.

These lanterns are made by physically &

mentally challenged individuals from

economically backward communities.

Chirag

HDFC has been supporting various programs

of DEEDS, working with hearing impaired

individuals by making them financially self-

reliant, over the years

DEEDS.

VishwasVidyalaya - HDFC partnered with

Vishwas to support their initiative of

empowering the disabled in Gurgaon. The

belief is that everyone has a right to access

basic health care and education irrespective of

disability, gender, class or caste. It is

operational from a leased 4.5 acre site where

every child has a right to meaningful and

quality education.

Vishwas


Health Services

Improving

Nutrition

and Health

in urban

slums

HDFC partnered SNEHA in its initiative of

providing solutions to issues of nutrition and

health in urban slum communities. Specifically

with respect to the concerns of unhealthy

newborn babies and unhealthy lactating

mothers.

The program is run in 9 wards of Mumbai

specifically with health posts covering a

population of approximately 100,000 and with

maternity homes/tertiary hospitals covering a

radius of 6-7 kms.

Sneha

Child care

HDFC has been supporting the on-going

running expenses of the Centres for the past

several years of St. Jude India Child-Care

Centres

The Centre caters to a huge unmet social need

to provide a safe and clean environment for

children to recuperate following treatment for

serious chronic diseases.

The organisation runs 7 centres housing

children suffering from cancer in Mumbai

where free accommodation is provided to

needy children (and their immediate family)

St. Jude India

Child-Care

Centre

Leprosy

Eradication

HDFC has been regularly supporting the

ongoing activities of Alert-India, which is

works towards eradication of leprosy for the

last 28 years.

Their Leprosy Elimination Centre is a one of a

kind in the country. It is in contact with over a

1,000 patients living in their project areas.

Alert India

Betterment

of Adults

HDFC supported the running expense of the

workshop of SPACE, an NGO working for

betterment of adults affected by Cerebral Palsy

for a period of one year in Pune.

SPACE

(c) Financial Inclusion

HDFC’s initiatives target segments of the population that have limited or no access to

the formal banking system for their basic banking and credit requirements, by building


a robust and sustainable model that provides relevant services and viable and timely

credit that ultimately results in economically uplifting its customers.6The bank in

partnership with 104 Microfinance institutions and 203 NGOs has extended credit

facilities exceeding Rs. 700 crores in 17 states and has financially included over 2

million rural households creating inroads to alleviate poverty that is prevalent in

certain sections of the countrya. By March 31, 2014 HDFC Bank will endeavour to bring

10 million households currently excluded from basic banking services under the fold of

this program.

(d) Rural Initiative

The Bank offers products and services such as savings, current, fixed & recurring

deposits, loans, ATM facilities, investment products such as mutual funds and insurance,

electronic funds transfers, drafts and remittances etc in its rural and underbanking

locations. Some of these branches are hubs for other inclusion initiatives such as direct

linkages to self help groups and to promote mutual guarantee micro-loans, POS

terminals and information technology enabled kiosks, as well as other ICT initiatives

such as mobile banking in these locations. Apart from loans directly linked to

agriculture such as pre and post harvest credit, there are many other credit products

that the Bank uses to aid financial betterment in rural locations. Loans for tractors,

commercial vehicles, two wheelers etc. supplement the farmer’s income by improving

productivity and reducing expenses.

(e) Loans to Self Help Groups and Mutual Guarantee Micro loans7

HDFC Bank has been working with various non-government organizations in order to

cover a wider consumer base than that it could have reached through its branch

network. The NGOs that the Bank partners work with the objective of providing credit

for income generation activities, (often by providing training, vocational guidance and

marketing support to their members). Over the last one year the Bank has accelerated

its direct linkage program to self-help groups, under this program the Bank itself works

at the grass root level with women in villages, conducts financial literacy programs,

forms groups and then funds these groups for income generation activities. Till date the

Bank has lent to over 54,000 self-help groups covering approximately 8 lakh

households.

6www.Karmayog.org

awww.moneycontrol.com

7http://www.hdfcbank.com/common/pdf/corporate/Bank-Annual-Report-2011-Part1.pdf

http://www.hdfcbank.com/common/pdf/corporate/Bank-Annual-Report-2011-Part1.pdf


(f) Agriculture and Allied Activities

An innovative model has currently been implemented with dairy and sugarcane

farmers. The initiative currently underway includes the appointment of dairy societies

and sugarcane co-operatives as business correspondents, through whom the Bank

opens accounts of individual farmers attached to these societies. The societies route all

payments to the farmers.

(g) Small and Micro Enterprises

The Bank offers complete banking solutions to micro, small and medium scale

enterprises across industry segments including manufacturers, retailers, wholesalers /

traders and services. The entire suite of financial products including cash credit,

overdrafts, term loans, bills discounting, export packing credit, letter of credit, bank

guarantees, cash management services and other structured products are made

available to these customers.

2.3 Environmental CSR(5)

(a) Environmental Sustainability

HDFC Bank believes in taking responsibility for the effects of its operations in society

and on the environment and this belief embodies its approach to the reduction of

carbon emissions.

Taking forward this commitment the Bank has undertaken the following projects:

1. Annual Foot-printing / Calculation of its carbon emissions

The Bank has developed and put in place a template to collate and calculate its carbon

emissions on an annual basis. This provides us with our emissions regarding travel,

electricity, paper and other utilities, which then enables us to take efforts in specific

areas in order for the Bank to reduce the impact of its operations on the environment.

2. Carbon Disclosure Project

The Bank has been associated with the carbon disclosure project since 2007, adhering

to their disclosure practices, each year they have strived to improve the quality of


reporting and the number of parameters that go into the disclosure. In the year 2010,

HDFC Bank registered as a signatory to the carbon disclosure project.

3. Carbon Management Awareness

Employees are made aware of the importance of conservation of natural resources and

smart resource management techniques through various e-mailers and other

communications sent out periodically.

(b) Green Initiative

In line with its commitment to green and sustainable development HDFC bank has

followed green principles in the construction of its back office premises located in

Mumbai. The building core and shell has been designed and implemented in lines with a

LEED rating of 'gold'. All materials used in the construction of the interiors of the

building conform to green norms for commercial premises. The operations of the

premises consume less than one watt per square foot of space. Indoor air quality is

monitored through Co2 control and sewage for the building is treated and recycled.

Corporate Governance8

The Composition of the Board of Directors of the Bank is governed by the Companies

Act, 1956, the Banking Regulation Act, 1949 and the listing requirements of the Indian

Stock Exchanges where the securities issued by the bank are listed. The Board has

following ten (10) Directors as on March 31, 2011:-

Executive Directors

Mr.AdityaPuri:-Holds a Bachelor's degree in Commerce from Punjab University

and is an associate member of the Institute of Chartered Accountants of India. He

has been the Managing Director of the Bank since September 1994.

Mr. Harish Engineer:-is Science Graduate from Mumbai University and holds a

Diploma in Business Management

Mr.PareshSukthankar:-Did his Masters in Management Studies (MBA) from

Jamnalal Bajaj Institute (University of Mumbai) and the Advanced Management

Program (AMP) from the Harvard Business School.

Non Executive Director

8www.hdfcbank.com/aboutus/cg/annual_reports.htm


Mrs.RenuKarnad:- represents HDFC Limited on the Board of the Bank. She is a

Law graduate and also holds a Master's Degree in Economics.

Independent Directors

Mr. C. M. Vasudev :- holds a Master's Degree in Economics and Physics. He joined

the Indian Administrative Services in 1966

Mr.AshimSamanta :- holds a Bachelor of Commerce degree from University of

Mumbai. He has vast experience in the field of bulk drugs and fine chemicals.

Dr.PanditPalande :- extensive experience of working in the fields of business

administration, management and agriculture.

Mr.ParthoDatta :- appointed as an additional Director during the year. He is an

associate member of the Institute of Chartered Accountants of India (ICAI)

Mr. Bobby Parikh :- holds a Bachelor's degree in Commerce from the Mumbai

University and qualified as a Chartered Accountant in 1987

Mr. A. N. Roy: is M.A., M.Phil. and is a distinguished retired civil servant. During

his long career of 38 years in the prestigious Indian Police Service ("IPS")

Various Committees of BOD

Audit and Compliance Committee

Compensation Committee

Investor Grievance (Share) Committee

Risk Policy and Monitoring Committee

Credit Approval Committee

Premises Committee

Nomination Committee

Fraud Monitoring Committee

Customer Service Committee

• Efforts would lead to reduced events of critical illnesses or hospitalisation.

Awards9

• Various awards and recognition have been conferred on theBank by leading

domestic and international organizations during the fiscal year ended March 31,

2011, some of them are:

• FE-EVI Green Business Leadership Award

9Source: www.Contify banking.com


• 'Best Corporate Social Responsibility Practice' award at ‘The Business for Social

Responsibility Awards 2007’presented by the Bombay Stock Exchange and

Nasscom Foundation.

• Asian Banker 2011

• Strongest Bank in the Asia Pacific region

• NDTV Business Leadership Awards 2010

• Best Private Sector Bank

• IDRBT Technology 2009 Awards

• HDFC has bagged a fifth place in annual list of the World's Most Ethical

Companies. HDFC is the only Indian company to get a place in the list

Problems faced by HDFC bank while implementing the

projects10

• Communities often lack awareness about health cover needs and the complex

situation of healthcare provision detains them from seeking quality healthcare.

• There is a need to demystify health insurance, healthcare and hospitalization

apprehensions

• They often try pushing a plain vanilla product to the community ignoring the

need to study and develop need-based products. This may often lead to ignoring

the opportunity to pass premium benefits to the end user.

• A better experience results from mechanisms put in place to regularly monitor

the products and services, collection of feedback from different stakeholders and

innovations in policy and claims administration.

• Micro-health insurance initiatives should ideally be integrated within a

community health intervention.

10

Source:This was the response given by Mr.AyanChatterjee, HDFC , Mumbai to microfinance community


Competitor Analysis

HDFC ICICI SBI CITIBANK

Profits(in Cr Rs) 3926 5151 7370 48760

Spending on CSR(in Cr Rs) 8.8 40 80 460

% Spending on CSR 0.22 0.77 1.08 0.94

If government imposes 2% legal binding on CSR activities, future is spending (in Cr Rs.)

78.52 103.2 147.4 17.2 (Citibank India)


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