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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.
2 HDFC: CSR Case Study
(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
3 HDFC: CSR Case Study
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
4 HDFC: CSR Case Study
• 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
5 HDFC: CSR Case Study
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
6 HDFC: CSR Case Study
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.
7 HDFC: CSR Case Study
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
8 HDFC: CSR Case Study
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
9 HDFC: CSR Case Study
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
10 HDFC: CSR Case Study
(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
11 HDFC: CSR Case Study
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
12 HDFC: CSR Case Study
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
13 HDFC: CSR Case Study
• '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
14 HDFC: CSR Case Study
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)
15 HDFC: CSR Case Study
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in-south-india-2011-02-03
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Part1.pdf
http://www.hdfc.com/others/social
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Karmayog.org
7)MONEYCONTROL .(2011) Retrieved 20 August 2011 from MoneyControl website :
www.moneycontrol.com
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30100701-public.pdf