After having recently concluded a deal to buy-out TimesBank, HDFC Bank is now considering entering into alliances with software companies as part of its e-banking initiative.
HDFC Bank, promoted by the Housing Development Finance Corporation Ltd., provides a range of banking services including working capital finance, trade services, corporate finance and merchant banking. The bank also offers banking services via the Internet.
HDFC Bank, which already has a presence on the Internet via its 'Netbanking' service, is planning to step up its presence on the Internet. The bank is planning to offer a its customers the facility to buy goods on the Internet. In this connection, it is setting up a secure payments gateway for e-commerce. This has been reported by a leading national daily.
With HDFC Bank going aggressive on its e-banking initiative, it needs to further spruce up its infotech division. It is here that the need for alliances with external software firms comes into the picture. The Bank authorities have even stated that if the need arises, HDFC Bank may even pick up equity in the software companies.
The Bank's decision to enter into alliances with software companies will benefit it in a number of ways. HDFC Bank would then be able to specialise in developing banking products and improving services even as its partners take on the development work. Moreover, with the Internet providing unlimited opportunities for growth, the Bank needs to have specialised teams in place that will direct it as new technologies unfold and competition picks up.
The only hitch regarding its web presence is the absence of laws pertaining to transactions on the Internet.
HDFC Bank has been rated a 'BUY' mainly on account of its excellent management, strong promoters and the efforts taken by them to control the non performing assets (NPAs).
HDFC Bank declared the results for the third quarter of financial year ending March 2017 (3QFY17). The bank has reported 18% YoY and 15% YoY growth in net interest income and net profits respectively in 3QFY17.
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