##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 20-F
  o
    
    REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
 OR
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended March 31, 2005
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For
the transition period from
 to
 OR
 o
    
    SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Date
of event requiring this shell company report ;
 Commission file number 001-15216
 HDFC BANK LIMITED
  
 India
 HDFC Bank House,
Senapati Bapat Marg, Lower Parel, Mumbai- 400 013, India
  Title of each class
    
    Name of each exchange on which registeredAmerican Depositary Shares
    
    The New York Stock ExchangeEach representing three equity shares, par value Rs. 10 per share
 
 
    þ o
  o þ
  o þ




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TABLE OF CONTENTS
 CROSS REFERENCE SHEET
    
    
    2EXCHANGE RATES
    
    
    4FORWARD- LOOKING STATEMENTS
    
    
    6BUSINESS
    
    
    7RISK FACTORS
    
    
    29PRICE RANGE OF OUR AMERICAN DEPOSITARY SHARES AND EQUITY SHARES
    
    
    40DESCRIPTION OF EQUITY SHARES
    
    
    42DIVIDEND POLICY
    
    
    43SELECTED FINANCIAL AND OTHER DATA
    
    
    44SELECTED STATISTICAL INFORMATION
    
    
    48MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION
    
    
    64MANAGEMENT
    
    
    83PRINCIPAL SHAREHOLDERS
    
    
    98RELATED PARTY TRANSACTIONS
    
    
    99TAXATION
    
    
    102SUPERVISION AND REGULATION
    
    
    109EXCHANGE CONTROLS
    
    
    124RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES
    
    
    125ADDITIONAL INFORMATION
    
    
    126INDEX TO
FINANCIAL STATEMENTS
    
    
    F-1SIGNATURESINDEX
OF EXHIBITSEX-12.1 CERTIFICATION REQUIRED BY RULE 13a-14(a)EX-12.2 CERTIFICATION REQUIRED BY RULE 13a-14(a)EX-13 CERTIFICATION REQUIRED BY RULE 13a-14(b)
  1




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##### Table of Contents



CROSS REFERENCE SHEET
 1
 Form 20-F ItemNumber
    
    Item Caption
    
    Location
    
    PagePart IItem 1
    
    Identity of Directors, Senior
Management and Advisors
    
    Not ApplicableItem 2
    
    Offer Statistics and Expected Timetable
    
    Not ApplicableItem 3
    
    Key Information
    
    Exchange Rates
    
    
    4Risk Factors
    
    
    29Selected Financial and Other Data
    
    
    44Item 4
    
    Information on the Company
    
    Business
    
    
    7Selected Statistical Information
    
    
    48Managements Discussion and Analysis
    
    
    64Principal Shareholders
    
    
    98Related Party Transactions
    
    
    99Supervision and Regulation
    
    
    109Item 5
    
    Operating and Financial Review and
Prospects
    
    Managements Discussion and Analysis
    
    
    64Item 6
    
    Directors, Senior Management and Employees
    
    Business  Employees
    
    
    27Management
    
    
    83Principal Shareholders
    
    
    98Item 7
    
    Major Shareholders and Related Party
    
    Principal Shareholders
    
    
    98Transactions
    
    Related Party Transactions
    
    
    99Item 8
    
    Financial Information
    
    Financial Statements
    
    
    F-1Item 9
    
    The Offer and Listing
    
    Price Range of Our American
Depositary Share and Equity Shares
    
    
    40Item 10
    
    Additional Information
    
    Management
    
    
    83Description of Equity Shares
    
    
    42Taxation
    
    
    102Supervision and Regulation
    
    
    109Exchange Controls
    
    
    124Restrictions on Foreign Ownership of
Indian Securities
    
    
    125Additional Information
    
    
    126Item 11
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    Business  Risk Management
    
    
    21Selected Statistical Information
    
    
    48Notes to Financial Statements
    
    
    F-7Item 12
    
    Description of Securities Other than
Equity Securities
    
    Not Applicable
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Form 20-F ItemNumber
    
    Item Caption
    
    Location
    
    PagePart IIItem 13
    
    Defaults, Dividend Arrearages and
Delinquencies
    
    Not ApplicableItem 14
    
    Material Modifications to the Rights
of Security Holders and Use of
Proceeds
    
    Not ApplicableItem 15
    
    Controls and Procedures
    
    Management
    
    
    83Item 16A
    
    Audit Committee Financial Expert
    
    Management
    
    
    83Item 16B
    
    Code of Ethics
    
    Management
    
    
    83Item 16C
    
    Principal Accountant Fees and Services
    
    Management
    
    
    83Part IIIItem 18
    
    Financial Statements
    
    Financial Statements
    
    
    F-1Report of Independent Auditors
    
    
    F-2Item 19
    
    Exhibits
    
    Exhibits
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EXCHANGE RATES
      Fiscal Year
    
    Period End(1)
    
    
    Average(1)(2)
    
    
    High
    
    
    Low2001
    
    
    46.85
    
    
    
    45.88
    
    
    
    47.47
    
    
    
    46.632002
    
    
    48.83
    
    
    
    47.81
    
    
    
    48.91
    
    
    
    46.582003
    
    
    47.53
    
    
    
    48.36
    
    
    
    49.07
    
    
    
    47.532004
    
    
    43.40
    
    
    
    45.78
    
    
    
    47.46
    
    
    
    43.402005
    
    
    43.62
    
    
    
    44.87
    
    
    
    46.45
    
    
    
    43.27
 (1)
    
    The noon buying rate at each period end and the average rate for each period
differed from the exchange rates used in the preparation of our financial statements.(2)
    
    Represents the average of the noon buying rate on the
last day of each month during the period.
 
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Month
    
    Period End
    
    
    Average
    
    
    High
    
    
    LowMarch
    
    
    43.62
    
    
    
    43.59
    
    
    
    43.70
    
    
    
    43.44April
    
    
    43.48
    
    
    
    43.64
    
    
    
    43.72
    
    
    
    43.48May
    
    
    43.62
    
    
    
    43.41
    
    
    
    43.62
    
    
    
    43.21June
    
    
    43.51
    
    
    
    43.52
    
    
    
    43.71
    
    
    
    43.44July
    
    
    43.40
    
    
    
    43.43
    
    
    
    43.59
    
    
    
    43.05August
    
    
    44.00
    
    
    
    43.54
    
    
    
    44.00
    
    
    
    43.36
  5




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FORWARD-LOOKING STATEMENTS
   6




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BUSINESS
 Overview
      Our Competitive Strengths
  We are a leader among Indian banks in our use of technology.
  7




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We deliver high quality service with superior execution.
  We offer a wide range of products to our clients in order to service their banking needs.
  We have an experienced management team.
  Our Business Strategy
  Increase our market share in Indias expanding banking and financial services industry.
  Maintain our current high standards for asset quality through disciplined credit risk
management.
  Maintain a low cost of funds.
  Focus on high earnings growth with low volatility.
  8




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Our Principal Business Activities
  Years Ended March 31,2003
    
    
    2004
    
    
    2005
    
    
    2005(In millions, except percentage)Retail banking
    
    Rs.
    6,150.2
    
    
    Rs.
    8,847.9
    
    
    Rs.
    13,037.0
    
    
    
    61.6
    %Wholesale banking
    
    
    3,004.0
    
    
    
    4,653.2
    
    
    
    7,192.4
    
    
    
    34.0
    %Treasury operations
    
    
    2,147.2
    
    
    
    1,461.5
    
    
    
    919.6
    
    
    
    4.4
    %Net revenue
    
    Rs.
    11,301.4
    
    
    Rs.
    14,962.6
    
    
    Rs.
    21,149.0
    
    
    
    100.0
    %
 Retail Banking
 Overview
    Retail Loans and Other Asset Products
  9




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As of March 31, 2005No. of Loans
    
    
    Value
    
    
    % of TotalValue(In thousands)
    
    
    (In millions)Retail Loans:Auto loan(1)
    
    
    73
    
    
    Rs.
    21,055.1
    
    
    US$
    482.7
    
    
    
    15.7
    %Commercial vehicles and construction equipment finance
    
    
    29
    
    
    
    21,924.2
    
    
    
    502.6
    
    
    
    13.5Personal loans
    
    
    177
    
    
    
    20,518.3
    
    
    
    470.4
    
    
    
    11.8Loans against securities
    
    
    32
    
    
    
    12,347.2
    
    
    
    283.1
    
    
    
    7.6Two wheeler loans
    
    
    397
    
    
    
    10,418.0
    
    
    
    238.8
    
    
    
    6.4Retail business banking
    
    
    36
    
    
    
    11,050.7
    
    
    
    253.3
    
    
    
    7.6Credit cards
    
    
    1,262
    (2)
    
    
    6,892.9
    
    
    
    158.0
    
    
    
    4.2Other retail loans
    
    
    240
    
    
    
    8,459.6
    
    
    
    194.0
    
    
    
    2.5Total retail loans
    
    
    2,246
    
    
    
    112,666.0
    
    
    
    2,582.9
    
    
    
    69.3Mortgage-backed securities (home loans)(3)
    
    
    
    
    
    
    10,668.1
    
    
    
    244.6
    
    
    
    6.6Asset-backed securities (3)
    
    
    
    
    
    
    20,071.8
    
    
    
    460.2
    
    
    
    12.4Loan assignments
    
    
    
    
    
    
    18,992.3
    
    
    
    435.4
    
    
    
    11.7Total retail assets
    
    
    
    
    
    Rs.
    162,398.2
    
    
    US$
    3,723.1
    
    
    
    100.0
    %
  (1)
    
    Net of receivables securitized.(2)
    
    Number of cards in force.(3)
    
    Reflected at fair value. Auto Loans
  Commercial Vehicles and Construction Equipment Finance
  Personal Loans
  Loans Against Securities
  10




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Two Wheeler Loans
  Retail Business Banking
  Credit Cards
  Other Retail Loans
  Mortgage-Backed Securities (Home Loans)
  Asset-Backed Securities
  Loan Assignments
  11




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Securitization of Our Receivables to Others
  Retail Deposit Products
  As of March 31, 2005Value (In millions)
    
    % of total
    
    No. of accounts
    
    % of total(In thousands)Saving
    
    Rs.
    106,822.4
    
    
    US$
    2,448.9
    
    
    
    42.4
    %
    
    
    3,541.3
    
    
    
    77.5
    %Current
    
    
    45,512.4
    
    
    
    1,043.4
    
    
    
    18.1
    
    
    
    346.2
    
    
    
    7.6Time
    
    
    99,316.4
    
    
    
    2,276.9
    
    
    
    39.5
    
    
    
    683.7
    
    
    
    14.9Total
    
    Rs.
    251,651.2
    
    
    US$
    5,769.2
    
    
    
    100.0
    %
    
    
    4,571.2
    
    
    
    100.0
    %
  
    
    Savings accounts, which are demand deposits in checking accounts designed primarily
for individuals and trusts. These accrue interest at a fixed rate set by the RBI
(currently 3.5% per annum).
 
    
    Current accounts, which are non-interest-bearing checking accounts designed
primarily for small businesses. Customers have a choice of regular and premium product
offerings with different minimum average quarterly account balance requirements.
 
    
    Time deposits, which pay a fixed return over a predetermined time period.
  12




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Other Retail Services and Products
 Debit Cards
  Individual Depositary Accounts
  Mutual Fund Sales
  Insurance
  Investment Advice
  Bill Payment Services
  Corporate Salary Accounts
  13




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Non-Resident Indian Services
  Customers and Marketing
    Wholesale Banking
 Overview
    14




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Commercial Banking Products
 Commercial Loan Products and Credit Substitutes
    As of March 31,2003
    
    
    2004
    
    
    2005
    
    
    2005(In millions)Gross commercial loans:Working capital
    
    Rs.
    42,739.1
    
    
    Rs.
    54,104.5
    
    
    Rs.
    72,397.6
    
    
    US$
    1,659.7Term loans
    
    
    43,013.3
    
    
    
    53,819.3
    
    
    
    76,861.8
    
    
    
    1,762.1Total commercial loans
    
    Rs.
    85,752.4
    
    
    Rs.
    107,923.8
    
    
    Rs.
    149,259.4
    
    
    US$
    3,421.8Credit substitutes:Commercial paper
    
    Rs.
    6,009.7
    
    
    Rs.
    906.7
    
    
    Rs.
    1,297.3
    
    
    US$
    29.7Non-convertible debentures
    
    
    22,898.7
    
    
    
    14,852.0
    
    
    
    12,018.7
    
    
    
    275.5Preference shares
    
    
    844.4
    
    
    
    799.2
    
    
    
    564.9
    
    
    
    13.0Total credit substitutes
    
    Rs.
    29,752.8
    
    
    Rs.
    16,557.9
    
    
    Rs.
    13,880.9
    
    
    US$
    318.2Customer assets
    
    Rs.
    115,505.2
    
    
    Rs.
    124,481.7
    
    
    Rs.
    163,140.3
    
    
    US$
    3,740.0
  15




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Bill Collection, Documentary Credits and Guarantees
  As of March 31,2003
    
    
    2004
    
    
    2005
    
    
    2005(In millions)Bill collection
    
    Rs.
    117,809.0
    
    
    Rs.
    172,623.6
    
    
    Rs.
    359,609.0
    
    
    US$
    8,244.1Documentary credits
    
    
    25,721.0
    
    
    
    44,030.0
    
    
    
    56,702.9
    
    
    
    1,299.9Bank guarantees
    
    
    9,696.0
    
    
    
    15,197.0
    
    
    
    14,518.2
    
    
    
    332.7Total
    
    Rs.
    153,226.0
    
    
    Rs.
    231,850.6
    
    
    Rs.
    430,830.1
    
    
    US$
    9,876.9
 Bill
collection -
 Documentary
credits
 Bank
guarantees
 Foreign Exchange and Derivatives
  Precious Metals
  Wholesale Deposit Products
  16




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17




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Transactional Services
 Cash Management Services
       Clearing Bank Services for Stock and Commodity Exchanges
   18




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Custodial Services
  Correspondent Banking Services
   Tax Collections
  Treasury
    19




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Foreign Exchange
  Derivatives
  Domestic Money Market and Debt Securities Desk
  Equities Market
  Distribution Channels
  Branch Network
    20




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Automated Teller Machines
   Telephone Banking Call Centers
  Internet Banking
  Mobile Telephone Banking
  Risk Management
  Credit Risk
  21




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Wholesale Credit Risk
        22




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Retail Credit Risk
  Foreign Exchange, Derivatives and Trading Activities
  Market Risk
  23




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Asset Liability Management
       24




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Liquidity Risk
   Price Risk
      25




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Operational Risk
  
    
    to independently evaluate the adequacy of all internal controls;
    
    to ensure adherence to the operating guidelines, including regulatory and legal requirements; and
    
    to recommend operation process improvements.
     Competition
  Retail Banking
   26




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Wholesale
Banking
  Treasury
  Employees
      Properties
   27




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Legal Proceedings
  28




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RISK FACTORS
  Risks Relating to Our Business
 If we are unable to manage our rapid growth, our business could be adversely affected.
  
    
    recruiting, training and retaining sufficient skilled personnel;
    
    upgrading and expanding our technology platform;
    
    developing and improving our products and delivery channels;
    
    preserving our asset quality as our geographical presence increases
and customer profile changes; and
    
    maintaining high levels of customer satisfaction.
  Our business is vulnerable to volatility in interest rates.
   If the level of non-performing loans in our portfolio increases, then our business could suffer.
   29




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We have high concentrations of customer exposures to certain customers and sectors and if any of
these exposures were to become non-performing, the quality of our portfolio could be adversely
affected.
  retail)
(10.8%),
  We face greater credit risks than banks in more developed countries.
  We may be unable to foreclose on collateral when borrowers default on their obligations to us,
which may result in failure to recover the expected value of collateral security.
  30




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Our success depends in large part upon our management team and skilled personnel and our ability to
attract and retain such persons.
  In order to sustain our growth, we will need to maintain a minimum capital adequacy ratio. There is
no assurance that we will be able to access the capital markets when necessary to do so.
  Material changes in Indian banking regulations could harm our business.
  31




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We compete directly with banks that are much larger than we are.
  Consolidation in the banking industry could adversely affect us.
  Our funding is primarily short and medium-term and if depositors do not roll over deposited funds
upon maturity, our business could be adversely affected.
  We could be subject to volatility in revenue from our treasury operations.
  We could be adversely affected by the development of a nationwide interbank settlement system.
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Because of our many transactions with stock market participants, our business could suffer if there
is a prolonged or significant downturn on the Indian stock exchanges.
  Significant fraud, system failure or calamities could adversely impact our business.
   HDFC Limited controls a significant percentage of our share capital and exercises substantial
influence over board decisions.
  We may face potential conflicts of interest relating to our principal shareholder, HDFC Limited.
  33




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Recent RBI guidelines relating to ownership in private banks could discourage or prevent a change
of control or other business combination involving us and could require HDFC Limited to reduce
substantially its equity interest in us.
  We may face increased competition as a result of recently revised guidelines that relax
restrictions on the presence of foreign banks in India.
  If we fail to comply with new regulations of the Securities and Exchange Board of India or with
Section 404 of the Sarbanes-Oxley Act of 2002, our reputation and the value of our securities may
be adversely affected.
    34




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A change in U.S. GAAP accounting standards for employee stock options is likely to have an adverse
impact on our net income.
  Risks Relating to Investments in Indian Companies
 A slowdown in economic growth in India could cause our business to suffer.
  Political instability or changes in the government in India could delay the liberalization of the
Indian economy and adversely affect economic conditions in India generally, which could impact our
financial results and prospects.
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Terrorist attacks, civil unrest and other acts of violence or war involving India and other
countries could adversely affect the financial markets and our business.
   Natural calamities could have a negative impact on the Indian economy and cause our business to
suffer.
  Any downgrading of Indias debt rating by an international rating agency could have a negative
impact on our business.
  Risks Relating to the ADSs and Equity Shares
 Historically, our ADSs have traded at a significant premium to the trading prices of our underlying
equity shares, a situation which may not continue.
  36




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You will not be able to vote your ADSs.
  Your ability to withdraw equity shares from the depositary facility is uncertain and may be subject
to delays.
  There is a limited market for the ADSs.
  Conditions in the Indian securities market may affect the price or liquidity of our equity
shares and ADSs.
  Settlement of trades of equity shares on Indian stock exchanges may be subject to delays.
  You may be unable to exercise preemptive rights available to other shareholders.
  37




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Because the equity shares underlying our ADSs are quoted in rupees in India, you may be subject to
potential losses arising out of exchange rate risk on the Indian rupee and risks associated with
the conversion of rupee proceeds into foreign currency.
  
    
    the U.S. dollar equivalent of the Indian rupee trading price of our
equity shares in India and, indirectly, the U.S. dollar trading
price of our ADSs in the United States;
    
    the U.S. dollar equivalent of the proceeds that you would receive
upon the sale in India of any equity shares that you withdraw from
the depositary; and
    
    the U.S. dollar equivalent of cash dividends, if any, paid in
Indian rupees on the equity shares represented by our ADSs.
 Financial instability in other countries, particularly emerging market countries, could disrupt our
business and affect the price of our equity shares and ADSs.
  You may not be able to enforce a judgment of a foreign court against us.
  38




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There may be less company information available on Indian securities markets than securities
markets in developed countries.
  39




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PRICE RANGE OF OUR AMERICAN DEPOSITARY SHARES AND EQUITY SHARES
  Trading Prices of Our ADSs on the New York Stock Exchange
  
    
    the reported high and low prices for our ADSs in U.S. dollars on the New York Stock Exchange; and
    
    the average daily trading volume for our ADSs on the New York Stock Exchange.
 Price per ADS
    
    
    Average daily ADStrading volumeHigh
    
    
    Low
    
    
    (Number of ADSs)Fiscal2002 (beginning July 20, 2001)
    
    US$
    17.3
    
    
    US$
    12.4
    
    
    63,3182003
    
    
    16.3
    
    
    
    11.9
    
    
    42,7782004First Quarter
    
    
    19.3
    
    
    
    15.4
    
    
    42,013Second Quarter
    
    
    23.8
    
    
    
    18.8
    
    
    63,563Third Quarter
    
    
    34.4
    
    
    
    21.9
    
    
    79,561Fourth Quarter
    
    
    34.9
    
    
    
    27.0
    
    
    87,9822005First Quarter
    
    
    33.1
    
    
    
    19.6
    
    
    103,313Second Quarter
    
    
    34.0
    
    
    
    25.7
    
    
    37,966Third Quarter
    
    
    45.9
    
    
    
    30.5
    
    
    88,325Fourth Quarter
    
    
    50.0
    
    
    
    38.8
    
    
    194,834Most Recent Six MonthsMarch 2005
    
    
    50.0
    
    
    
    38.8
    
    
    193,195April 2005
    
    
    45.2
    
    
    
    40.0
    
    
    118,748May 2005
    
    
    44.3
    
    
    
    40.7
    
    
    135,414June 2005
    
    
    48.5
    
    
    
    41.3
    
    
    129,059July 2005
    
    
    52.7
    
    
    
    45.3
    
    
    177,835August 2005
    
    
    52.3
    
    
    
    45.7
    
    
    102,587
 40




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Trading Prices of Our Equity Shares on the National Stock Exchange
  
    
    the reported high and low market prices for our equity shares in rupees on the National Stock
Exchange;
    
    the imputed high and low closing sales prices for our equity shares translated into U.S. dollars; and
    
    the average daily trading volume for our equity shares on the National Stock Exchange.
 Price per
    
    
    Price per
    
    
    Average dailyEquity share
    
    
    equity share
    
    
    Equity shareHigh
    
    
    Low
    
    
    High
    
    
    Low
    
    
    trading volumeFiscal2001
    
    Rs.
    285.0
    
    
    Rs.
    185.1
    
    
    US$
    6.5
    
    
    US$
    4.2
    
    
    153,0892002
    
    
    255.0
    
    
    
    184.1
    
    
    
    5.8
    
    
    
    4.2
    
    
    85,1092003
    
    
    256.0
    
    
    
    186.0
    
    
    
    5.9
    
    
    
    4.3
    
    
    94,0162004First Quarter
    
    
    267.2
    
    
    
    231.0
    
    
    
    6.1
    
    
    
    5.3
    
    
    147,219Second Quarter
    
    
    303.5
    
    
    
    235.1
    
    
    
    7.0
    
    
    
    5.4
    
    
    258,724Third Quarter
    
    
    385.1
    
    
    
    265.5
    
    
    
    8.8
    
    
    
    6.1
    
    
    401,645Fourth Quarter
    
    
    406.8
    
    
    
    300.6
    
    
    
    9.3
    
    
    
    6.9
    
    
    365,2792005First Quarter
    
    
    400.0
    
    
    
    256.2
    
    
    
    9.2
    
    
    
    5.9
    
    
    250,044Second Quarter
    
    
    416.7
    
    
    
    341.1
    
    
    
    9.6
    
    
    
    7.8
    
    
    338,098Third Quarter
    
    
    530.0
    
    
    
    396.2
    
    
    
    12.2
    
    
    
    9.1
    
    
    346,242Fourth Quarter
    
    
    628.6
    
    
    
    475.1
    
    
    
    14.4
    
    
    
    10.9
    
    
    366,794Most
Recent Six MonthsMarch
    
    
    628.6
    
    
    
    508.0
    
    
    
    14.4
    
    
    
    11.6
    
    
    279,143April
    
    
    632.3
    
    
    
    516.1
    
    
    
    14.5
    
    
    
    11.8
    
    
    223,333May
    
    
    554.9
    
    
    
    448.0
    
    
    
    12.7
    
    
    
    10.3
    
    
    198,483June
    
    
    643.0
    
    
    
    534.0
    
    
    
    14.7
    
    
    
    12.2
    
    
    358,837July
    
    
    730.0
    
    
    
    537.9
    
    
    
    16.7
    
    
    
    12.3
    
    
    506,975August
    
    
    765.0
    
    
    
    628.3
    
    
    
    17.5
    
    
    
    14.4
    
    
    350,942
   41




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##### Table of Contents



DESCRIPTION OF EQUITY SHARES
  42




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##### Table of Contents



DIVIDEND POLICY
  Dividend per equity share
    
    Total amount of dividends paid(1)(In millions)Relating to Fiscal Year2001
    
    Rs.
    2.00
    
    
    US$
    0.046
    
    
    Rs.
    487.2
    
    
    US$
    11.22002
    
    
    2.50
    
    
    
    0.057
    
    
    
    703.4
    
    
    
    16.12003
    
    
    3.00
    
    
    
    0.069
    
    
    
    850.5
    
    
    
    19.52004
    
    
    3.50
    
    
    
    0.080
    
    
    
    1,000.5
    
    
    
    22.92005
    
    
    4.50
    
    
    
    0.103
    
    
    
    1,400.7
    
    
    
    32.1
 
 (1)
    
    Includes dividends paid on shares held by the Employees Welfare Trust.     43




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##### Table of Contents



SELECTED FINANCIAL AND OTHER DATA
   Years ended March 31,2001
    
    
    2002
    
    
    2003
    
    
    2004
    
    
    2005
    
    
    2005(In millions, except per equity share data)Selected income statement data:Interest and dividend revenue
    
    Rs.
    12,561.5
    
    
    Rs.
    16,448.0
    
    
    Rs.
    19,424.8
    
    
    Rs.
    24,591.5
    
    
    Rs.
    29,209.4
    
    
    US$
    669.6Interest expense
    
    
    7,573.4
    
    
    
    10,762.5
    
    
    
    11,779.2
    
    
    
    11,983.1
    
    
    
    13,223.7
    
    
    
    303.2Net interest revenue
    
    
    4,988.1
    
    
    
    5,685.5
    
    
    
    7,645.6
    
    
    
    12,608.4
    
    
    
    15,985.7
    
    
    
    366.4Allowance for credit losses, net
    
    
    247.0
    
    
    
    451.6
    
    
    
    741.5
    
    
    
    2,343.4
    
    
    
    3,048.2
    
    
    
    69.9Net interest revenue after allowance for credit losses
    
    
    4,741.1
    
    
    
    5,233.9
    
    
    
    6,904.1
    
    
    
    10,265.0
    
    
    
    12,937.5
    
    
    
    296.5Non-interest revenue, net
    
    
    1,627.1
    
    
    
    3,215.1
    
    
    
    4,397.3
    
    
    
    4,697.6
    
    
    
    8,211.5
    
    
    
    188.3Net revenue
    
    
    6,368.2
    
    
    
    8,449.0
    
    
    
    11,301.4
    
    
    
    14,962.6
    
    
    
    21,149.0
    
    
    
    484.8Non-interest expense
    
    
    3,162.5
    
    
    
    4,196.0
    
    
    
    6,057.9
    
    
    
    8,369.3
    
    
    
    11,413.9
    
    
    
    261.6Income before income taxes
    
    
    3,205.7
    
    
    
    4,253.0
    
    
    
    5,243.5
    
    
    
    6,593.3
    
    
    
    9,735.1
    
    
    
    223.2Income tax expense
    
    
    1,065.1
    
    
    
    1,294.6
    
    
    
    1,729.7
    
    
    
    1,838.8
    
    
    
    3,125.4
    
    
    
    71.7Net income
    
    Rs.
    2,140.6
    
    
    Rs.
    2,958.4
    
    
    Rs.
    3,513.8
    
    
    Rs.
    4,754.5
    
    
    Rs.
    6,609.7
    
    
    US$
    151.5Per equity share data:Earnings per share, basic
    
    Rs.
    8.97
    
    
    Rs.
    11.10
    
    
    Rs.
    12.57
    
    
    Rs.
    16.87
    
    
    Rs.
    22.78
    
    
    US$
    0.52Earnings per share, diluted
    
    
    8.97
    
    
    
    11.04
    
    
    
    12.51
    
    
    
    16.70
    
    
    
    22.60
    
    
    
    0.52Dividends per share
    
    
    2.00
    
    
    
    2.50
    
    
    
    3.00
    
    
    
    3.50
    
    
    
    4.50
    
    
    
    0.10Book value(1)
    
    
    44.88
    
    
    
    79.06
    
    
    
    93.36
    
    
    
    110.36
    
    
    
    159.22
    
    
    
    3.65Equity share data:Equity shares outstanding at end of period
    
    
    239.7
    
    
    
    279.0
    
    
    
    279.7
    
    
    
    282.8
    
    
    
    309.9
    
    
    
    309.9Weighted average equity shares outstanding  basic
    
    
    238.6
    
    
    
    266.6
    
    
    
    279.6
    
    
    
    281.9
    
    
    
    290.1
    
    
    
    290.1Weighted average equity shares outstanding  diluted
    
    
    241.2
    
    
    
    267.9
    
    
    
    281.4
    
    
    
    284.7
    
    
    
    292.5
    
    
    
    292.5
 44




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##### Table of Contents



Years ended March 31,2001
    
    
    2002
    
    
    2003
    
    
    2004
    
    
    2005
    
    
    2005(In millions)Selected balance sheet data:Total assets
    
    Rs.
    161,128.5
    
    
    Rs.
    243,032.2
    
    
    Rs311,840.7
    
    Rs.
    426,835.6
    
    
    Rs.
    529,454.2
    
    
    US$
    12,137.9Cash and cash equivalents
    
    
    26,121.1
    
    
    
    34,590.6
    
    
    
    23,944.9
    
    
    
    33,010.4
    
    
    
    37,575.8
    
    
    
    861.5Term placements (2)
    
    
    
    
    
    
    
    
    
    
    7,747.4
    
    
    
    3,565.2
    
    
    
    8,699.6
    
    
    
    199.4Loans, net of allowance
    
    
    51,083.2
    
    
    
    71,528.9
    
    
    
    118,299.9
    
    
    
    177,681.1
    
    
    
    256,486.9
    
    
    
    5,880.0Of which:Non-performing loans, net of specific allowances
    
    
    485.5
    
    
    
    536.4
    
    
    
    683.3
    
    
    
    269.9
    
    
    
    591.4
    
    
    
    13.5Investments:Investments held for trading
    
    
    
    
    
    
    3,837.6
    
    
    
    3,976.1
    
    
    
    6,233.8
    
    
    
    1,278.5
    
    
    
    29.3Investments available for sale
    
    
    69,928.9
    
    
    
    80,320.6
    
    
    
    98,929.2
    
    
    
    133,274.6
    
    
    
    204,292.8
    
    
    
    4,683.5Investments held to maturity(3)
    
    
    
    
    
    
    35,429.9
    
    
    
    38,426.7
    
    
    
    36,368.4
    
    
    
    
    
    
    
    Total
    
    
    69,928.9
    
    
    
    119,588.1
    
    
    
    141,332.0
    
    
    
    175,876.8
    
    
    
    205,571.3
    
    
    
    4,712.8Of
which:Credit substitutes(4)
    
    
    22,344.2
    
    
    
    35,126.0
    
    
    
    29,752.8
    
    
    
    16,557.9
    
    
    
    13,880.9
    
    
    
    318.2Total liabilities
    
    
    150,368.7
    
    
    
    220,971.3
    
    
    
    285,727.6
    
    
    
    395,619.8
    
    
    
    480,116.2
    
    
    
    11,006.8Long-term debt
    
    
    2,220.6
    
    
    
    2,157.9
    
    
    
    2,116.0
    
    
    
    6,086.0
    
    
    
    5,028.1
    
    
    
    115.3Short-term borrowings
    
    
    16,671.2
    
    
    
    21,600.3
    
    
    
    21,579.6
    
    
    
    24,064.2
    
    
    
    62,079.1
    
    
    
    1,423.2Total deposits
    
    
    116,581.1
    
    
    
    176,538.1
    
    
    
    223,760.0
    
    
    
    304,062.0
    
    
    
    363,542.5
    
    
    
    8,334.3Shareholders equity
    
    
    10,759.8
    
    
    
    22,060.9
    
    
    
    26,113.1
    
    
    
    31,215.8
    
    
    
    49,338.0
    
    
    
    1,131.1
 Years ended March 31,2001
    
    
    2002
    
    
    2003
    
    
    2004
    
    
    2005
    
    
    2005(In millions)Period
average(5)Total assets
    
    Rs.
    130,056.0
    
    
    Rs.
    202,013.2
    
    
    Rs.
    257,020.8
    
    
    Rs.
    357,123.8
    
    
    Rs.
    448,029.6
    
    
    US$
    10,271.2Interest-earning assets
    
    
    119,714.5
    
    
    
    183,488.8
    
    
    
    230,451.9
    
    
    
    327,523.4
    
    
    
    424,620.1
    
    
    
    9,734.5Loans, net of allowance
    
    
    39,004.4
    
    
    
    59,374.9
    
    
    
    82,461.2
    
    
    
    136,527.4
    
    
    
    204,919.0
    
    
    
    4,697.8Total liabilities
    
    
    120,216.2
    
    
    
    185,512.4
    
    
    
    232,933.8
    
    
    
    328,458.9
    
    
    
    407,265.5
    
    
    
    9,336.7Interest-bearing liabilities
    
    
    86,738.9
    
    
    
    137,681.1
    
    
    
    175,598.6
    
    
    
    236,551.0
    
    
    
    298,276.8
    
    
    
    6,838.1Long-term debt
    
    
    1,718.2
    
    
    
    2,159.7
    
    
    
    2,280.3
    
    
    
    2,605.9
    
    
    
    5,371.3
    
    
    
    123.1Short-term borrowings
    
    
    10,472.9
    
    
    
    18,105.9
    
    
    
    15,362.9
    
    
    
    33,040.7
    
    
    
    42,594.6
    
    
    
    976.5Total deposits
    
    
    97,110.9
    
    
    
    142,854.5
    
    
    
    186,847.7
    
    
    
    262,707.7
    
    
    
    342,693.5
    
    
    
    7,856.3Of which:Interest-bearing deposits
    
    
    74,547.8
    
    
    
    117,415.5
    
    
    
    157,955.4
    
    
    
    200,904.4
    
    
    
    250,310.9
    
    
    
    5,738.5Shareholders equity
    
    
    9,839.8
    
    
    
    16,500.8
    
    
    
    24,087.0
    
    
    
    28,664.9
    
    
    
    40,764.1
    
    
    
    934.5
 45




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##### Table of Contents



As of or for the years ended March 31,2001
    
    
    2002
    
    
    2003
    
    
    2004
    
    
    2005(In percentage)Profitability:Net income as a percentage of:Average total assets
    
    
    1.6
    
    
    
    1.5
    
    
    
    1.4
    
    
    
    1.3
    
    
    
    1.5Average shareholders equity
    
    
    21.8
    
    
    
    17.9
    
    
    
    14.6
    
    
    
    16.6
    
    
    
    16.2Dividend payout ratio(6)
    
    
    22.8
    
    
    
    23.8
    
    
    
    24.2
    
    
    
    21.0
    
    
    
    21.2Spread(7)
    
    
    3.6
    
    
    
    2.4
    
    
    
    2.7
    
    
    
    3.5
    
    
    
    3.5Net interest margin(8)
    
    
    4.2
    
    
    
    3.1
    
    
    
    3.3
    
    
    
    3.8
    
    
    
    3.8Cost-to-net revenue ratio(9)
    
    
    49.7
    
    
    
    49.7
    
    
    
    53.6
    
    
    
    55.9
    
    
    
    54.0Cost-to-average assets ratio(10)
    
    
    2.4
    
    
    
    2.1
    
    
    
    2.4
    
    
    
    2.3
    
    
    
    2.5Capital:Total capital adequacy ratio(11)
    
    
    11.1
    
    
    
    13.9
    
    
    
    11.1
    
    
    
    11.7
    
    
    
    12.2Tier 1 capital adequacy ratio(11)
    
    
    8.7
    
    
    
    10.8
    
    
    
    9.5
    
    
    
    8.0
    
    
    
    9.6Tier 2 capital adequacy ratio(11)
    
    
    2.4
    
    
    
    3.1
    
    
    
    1.6
    
    
    
    3.7
    
    
    
    2.6Average shareholders equity as a percentage of average total assets
    
    
    7.6
    
    
    
    8.2
    
    
    
    9.4
    
    
    
    8.0
    
    
    
    9.1Asset quality:Gross non-performing loans as a percentage of gross loans
    
    
    2.9
    
    
    
    2.7
    
    
    
    2.0
    
    
    
    1.7
    
    
    
    1.6Gross non-performing customer assets as a percentage of gross customer
assets(12)
    
    
    2.1
    
    
    
    1.9
    
    
    
    1.6
    
    
    
    1.6
    
    
    
    1.5Net non-performing loans as a percentage of net loans
    
    
    1.0
    
    
    
    0.7
    
    
    
    0.6
    
    
    
    0.2
    
    
    
    0.2Net non-performing customer assets as a percentage of net customer assets(12)
    
    
    0.7
    
    
    
    0.5
    
    
    
    0.5
    
    
    
    0.2
    
    
    
    0.2Net non-performing loans as a percentage of total assets
    
    
    0.3
    
    
    
    0.2
    
    
    
    0.2
    
    
    
    0.1
    
    
    
    0.1Specific allowance for credit losses as a percentage of gross non-performing
loans
    
    
    67.6
    
    
    
    72.6
    
    
    
    71.1
    
    
    
    91.0
    
    
    
    85.5Total allowance for credit losses as a percentage of gross non-performing loans
    
    
    77.1
    
    
    
    81.9
    
    
    
    78.8
    
    
    
    116.8
    
    
    
    133.2Allowance for credit losses as a percentage of gross total loans
    
    
    2.2
    
    
    
    2.2
    
    
    
    1.6
    
    
    
    1.9
    
    
    
    2.1
 
 (1)
    
    Represents the difference between total assets and total liabilities, divided by the
number of shares outstanding at the end of each reporting period.(2)
    
    Includes placements with banks and financial institutions with original maturities
of greater than three months.(3)
    
    During the year ended March 31, 2005, we transferred certain securities classified
as held to maturity to the available for sale category for reasons not permitted under U.S.
GAAP. As a result we were required to transfer all remaining securities to the available for
sale category and we are prevented from establishing a held to maturity portfolio until after
March 31, 2007. See Managements Discussion and Analysis of Financial Condition and Results
of Operations.(4)
    
    Credit substitutes consist of investments in commercial paper, debentures and
preference shares issued by our corporate customers. See Business  Commercial Banking
Products  Commercial Loan Products and Credit Substitutes.(5)
    
    Average balances are the average of daily outstanding amounts. Average figures are
unaudited.(6)
    
    Represents the ratio of total dividends payable on equity shares relating to each
fiscal year, excluding the dividend distribution tax, as a percentage of net income of that
year. Dividends of each year are typically paid in the following fiscal year. See Dividend
Policy.(7)
    
    Represents the difference between yield on average interest-earning assets and cost
of average interest-bearing liabilities. Yield on average interest-earning assets is the ratio
of interest revenue to average interest-earning assets. Cost of average interest-bearing
liabilities is the ratio of interest expense to 46




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##### Table of Contents



average interest-bearing liabilities. For purposes of calculating spread, interest bearing
liabilities include non-interest bearing current accounts and cash floats from transactional
services.(8)
    
    Represents the ratio of net interest revenue to average interest-earning assets. The
difference in net interest margin and spread arises due to the difference in the amount of
average interest-earning assets and average interest bearing liabilities. If average
interest-earning assets exceed average interest-bearing liabilities, net interest margin is
greater than spread. If average interest-bearing liabilities exceed average interest-earning
assets, net interest margin is less than spread.(9)
    
    Represents the ratio of non-interest expense to the sum of net interest revenue and
non-interest revenue.(10)
    
    Represents the ratio of non-interest expense to average total assets.(11)
    
    Tier 1 and Tier 2 capital adequacy ratios are computed in accordance with the
guidelines of the Reserve Bank of India, based on financial statements prepared in accordance
with Indian GAAP. See Supervision and Regulation.(12)
    
    Customer assets consist of loans and credit substitutes. 47




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##### Table of Contents



SELECTED STATISTICAL INFORMATION
  Average Balance Sheet
  Years ended March 31,2003
    
    2004
    
    2005Interest
    
    Average
    
    
    
    
    
    Interest
    
    Average
    
    
    
    
    
    Interest
    
    AverageAverage
    
    revenue/
    
    yield/
    
    Average
    
    revenue/
    
    yield/
    
    Average
    
    revenue/
    
    Yield/Balance
    
    expense
    
    cost
    
    Balance
    
    expense
    
    cost
    
    balance
    
    expense
    
    cost(In millions, except percentages)Assets:Interest-earning assets:Cash equivalents
    
    Rs.
    11,857.7
    
    
    Rs.
    549.0
    
    
    
    4.6
    %
    
    Rs.
    24,370.4
    
    
    Rs.
    856.8
    
    
    
    3.5
    %
    
    Rs.
    30,541.2
    
    
    Rs.
    835.9
    
    
    
    2.7
    %Term placements
    
    
    9,765.0
    
    
    
    684.4
    
    
    
    7.0
    %
    
    
    5,104.8
    
    
    
    252.8
    
    
    
    5.0
    %
    
    
    6,132.4
    
    
    
    398.6
    
    
    
    6.5
    %Investments available for sale:Tax free(1)
    
    
    7,779.0
    
    
    
    494.5
    
    
    
    6.4
    %
    
    
    25,286.0
    
    
    
    1,475.6
    
    
    
    5.8
    %
    
    
    19,486.5
    
    
    
    926.9
    
    
    
    4.8
    %Taxable
    
    
    75,867.8
    
    
    
    5,649.5
    
    
    
    7.4
    %
    
    
    99,107.3
    
    
    
    7,129.2
    
    
    
    7.2
    %
    
    
    151,689.8
    
    
    
    9,678.8
    
    
    
    6.4
    %Investments held to maturity
    
    
    36,775.4
    
    
    
    3,763.2
    
    
    
    10.2
    %
    
    
    31,576.2
    
    
    
    2,882.5
    
    
    
    9.1
    %
    
    
    10,001.0
    
    
    
    793.4
    
    
    
    7.9
    %Investments held for trading
    
    
    5,945.8
    
    
    
    478.9
    
    
    
    8.1
    %
    
    
    5,551.3
    
    
    
    289.6
    
    
    
    5.2
    %
    
    
    1,850.2
    
    
    
    144.4
    
    
    
    7.8
    %Loans, net:Retail loans
    
    
    20,846.5
    
    
    
    2,016.2
    
    
    
    9.7
    %
    
    
    52,903.7
    
    
    
    4,829.9
    
    
    
    9.1
    %
    
    
    94,398.6
    
    
    
    8,304.8
    
    
    
    8.8
    %Wholesale loans
    
    
    61,614.7
    
    
    
    5,789.1
    
    
    
    9.4
    %
    
    
    83,623.7
    
    
    
    6,875.1
    
    
    
    8.2
    %
    
    
    110,520.4
    
    
    
    8,126.6
    
    
    
    7.4
    %Total interest-earning assets:
    
    Rs.
    230,451.9
    
    
    Rs.
    19,424.8
    
    
    
    8.4
    %
    
    Rs.
    327,523.4
    
    
    Rs.
    24,591.5
    
    
    
    7.5
    %
    
    Rs.
    424,620.1
    
    
    Rs.
    29,209.4
    
    
    
    6.9
    %Non-interest-earning assets:Cash
    
    
    848.3
    
    
    
    
    
    
    
    
    
    
    
    1,631.4
    
    
    
    
    
    
    
    
    
    
    
    2,732.5Property and equipment
    
    
    4,924.5
    
    
    
    
    
    
    
    
    
    
    
    5,424.2
    
    
    
    
    
    
    
    
    
    
    
    6,251.2Other assets
    
    
    20,796.1
    
    
    
    
    
    
    
    
    
    
    
    22,544.8
    
    
    
    
    
    
    
    
    
    
    
    14,425.8Total non-interest earning assets
    
    
    26,568.9
    
    
    
    
    
    
    
    
    
    
    
    29,600.4
    
    
    
    
    
    
    
    
    
    
    
    23,409.5Total assets
    
    Rs.
    257,020.8
    
    
    Rs.
    19,424.8
    
    
    
    7.6
    %
    
    Rs.
    357,123.8
    
    
    Rs.
    24,591.5
    
    
    
    6.9
    %
    
    Rs.
    448,029.6
    
    
    Rs.
    29,209.4
    
    
    
    6.5
    %Liabilities:Interest-bearing liabilities:Savings account deposits
    
    Rs.
    36,419.7
    
    
    Rs.
    1,125.2
    
    
    
    3.1
    %
    
    Rs.
    61,535.8
    
    
    Rs.
    1,633.9
    
    
    
    2.7
    %
    
    Rs.
    97,026.4
    
    
    Rs.
    2,539.2
    
    
    
    2.6
    %Time deposits
    
    
    121,535.7
    
    
    
    9,383.3
    
    
    
    7.7
    %
    
    
    139,368.6
    
    
    
    8,645.3
    
    
    
    6.2
    %
    
    
    153,284.5
    
    
    
    8,534.9
    
    
    
    5.6
    %Short-term borrowings(2)
    
    
    15,362.9
    
    
    
    1,032.9
    
    
    
    6.7
    %
    
    
    33,040.7
    
    
    
    1,435.9
    
    
    
    4.3
    %
    
    
    42,594.6
    
    
    
    1,759.4
    
    
    
    4.1
    %Long-term debt
    
    
    2,280.3
    
    
    
    237.8
    
    
    
    10.4
    %
    
    
    2,605.9
    
    
    
    268.0
    
    
    
    10.3
    %
    
    
    5,371.3
    
    
    
    390.2
    
    
    
    7.3
    %Total interest-bearing liabilities
    
    Rs.
    175,598.6
    
    
    Rs.
    11,779.2
    
    
    
    6.7
    %
    
    Rs.
    236,551.0
    
    
    
    11,983.1
    
    
    
    5.1
    %
    
    Rs.
    298,276.8
    
    
    Rs.
    13,223.7
    
    
    
    4.4
    %Non-interest-bearing liabilities:Non-interest-bearing deposits (3)
    
    
    28,892.3
    
    
    
    
    
    
    
    
    
    
    
    61,803.3
    
    
    
    
    
    
    
    
    
    
    
    92,382.6Other liabilities
    
    
    28,442.9
    
    
    
    
    
    
    
    
    
    
    
    30,104.6
    
    
    
    
    
    
    
    
    
    
    
    16,606.1Total non-interest-bearing
liabilities
    
    
    57,335.2
    
    
    
    
    
    
    
    
    
    
    
    91,907.9
    
    
    
    
    
    
    
    
    
    
    
    108,988.7Total liabilities
    
    Rs.
    232,933.8
    
    
    Rs.
    11,779.2
    
    
    
    5.1
    %
    
    Rs.
    328,458.9
    
    
    Rs.
    11,983.1
    
    
    
    3.6
    %
    
    Rs.
    407,265.5
    
    
    Rs.
    13,223.7
    
    
    
    3.2
    %Shareholders equity
    
    
    24,087.0
    
    
    
    
    
    
    
    
    
    
    
    28,664.9
    
    
    
    
    
    
    
    
    
    
    
    40,764.1Total liabilities and
shareholders equity
    
    Rs.
    257,020.8
    
    
    Rs.
    11,779.2
    
    
    
    4.6
    %
    
    Rs.
    357,123.8
    
    
    Rs.
    11,983.1
    
    
    
    3.4
    %
    
    Rs.
    448,029.6
    
    
    Rs.
    13,223.7
    
    
    
    3.0
    %
 
 (1)
    
    Yields on tax free securities are not on a tax equivalent basis.(2)
    
    Includes securities sold under repurchase agreements.(3)
    
    Includes current accounts and cash floats from transactional services. 
 48




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##### Table of Contents



Analysis of Changes in Interest Revenue and Interest Expense Volume and Rate
  Fiscal 2004 vs. Fiscal 2003
    
    Fiscal 2005 vs. Fiscal 2004Increase (decrease)(1) due to
    
    Increase (decrease)(1) due toChange in
    
    
    
    
    
    
    
    
    
    Change inNet
    
    Average
    
    Change in
    
    Net
    
    Average
    
    Change inChange
    
    Volume
    
    Average Rate
    
    Change
    
    Volume
    
    Average Rate(In millions)Interest revenue:Cash equivalents
    
    Rs.
    307.8
    
    
    Rs.
    579.3
    
    
    Rs.
    (271.5
    )
    
    Rs.
    (20.9
    )
    
    Rs.
    216.9
    
    
    Rs.
    (237.8
    )Term placements
    
    
    (431.6
    )
    
    
    (326.6
    )
    
    
    (105.0
    )
    
    
    145.8
    
    
    
    50.9
    
    
    
    94.9Investments available for sale:Tax free
    
    
    981.1
    
    
    
    1,112.9
    
    
    
    (131.8
    )
    
    
    (548.7
    )
    
    
    (338.4
    )
    
    
    (210.3
    )Taxable
    
    
    1,479.7
    
    
    
    1,730.5
    
    
    
    (250.8
    )
    
    
    2,549.6
    
    
    
    3,782.5
    
    
    
    (1,232.9
    )Investments held to maturity
    
    
    (880.7
    )
    
    
    (532.0
    )
    
    
    (348.7
    )
    
    
    (2,089.1
    )
    
    
    (1,969.5
    )
    
    
    (119.6
    )Investments held for trading
    
    
    (189.3
    )
    
    
    (31.8
    )
    
    
    (157.5
    )
    
    
    (145.2
    )
    
    
    (193.1
    )
    
    
    47.9Loans, net:Retail loans
    
    
    2,813.7
    
    
    
    3,100.5
    
    
    
    (286.8
    )
    
    
    3,474.9
    
    
    
    3,788.3
    
    
    
    (313.4
    )Wholesale loans
    
    
    1,086.0
    
    
    
    2,067.9
    
    
    
    (981.9
    )
    
    
    1,251.5
    
    
    
    2,211.3
    
    
    
    (959.8
    )Total interest-earning assets
    
    Rs.
    5,166.7
    
    
    Rs.
    7,700.7
    
    
    Rs.
    (2,534.0
    )
    
    Rs.
    4,617.9
    
    
    Rs.
    7,548.9
    
    
    Rs.
    (2,931.0
    )Interest expense:Savings account deposits
    
    Rs.
    508.7
    
    
    Rs.
    776.0
    
    
    Rs.
    (267.3
    )
    
    Rs.
    905.3
    
    
    Rs.
    942.3
    
    
    Rs.
    (37.0
    )Time deposits
    
    
    (738.0
    )
    
    
    1,376.8
    
    
    
    (2,114.8
    )
    
    
    (110.4
    )
    
    
    863.2
    
    
    
    (973.6
    )Short-term borrowings
    
    
    403.0
    
    
    
    1,188.5
    
    
    
    (785.5
    )
    
    
    323.5
    
    
    
    415.2
    
    
    
    (91.7
    )Long-term debt
    
    
    30.2
    
    
    
    34.0
    
    
    
    (3.8
    )
    
    
    122.2
    
    
    
    284.4
    
    
    
    (162.2
    )Total interest-bearing liabilities
    
    Rs.
    203.9
    
    
    Rs.
    3,375.3
    
    
    Rs.
    (3,171.4
    )
    
    Rs.
    1,240.6
    
    
    Rs.
    2,505.1
    
    
    Rs.
    (1,264.5
    )Net interest revenue
    
    Rs.
    4,962.8
    
    
    Rs.
    4,325.4
    
    
    Rs.
    637.4
    
    
    Rs.
    3,377.3
    
    
    Rs.
    5,043.8
    
    
    Rs.
    (1,666.5
    )
 
 (1)
    
    The changes in net interest revenue between periods have been reflected as
attributed either to volume or rate changes. For purposes of this table, changes which are due
to both volume and rate have been allocated solely to changes in rate. Yields, Spreads and Margins
  Years ended March 31,2003
    
    2004
    
    2005(In millions, except percentages)Interest revenue
    
    Rs.
    19,424.8
    
    
    Rs.
    24,591.5
    
    
    Rs.
    29,209.4Average interest-earning assets
    
    
    230,451.9
    
    
    
    327,523.4
    
    
    
    424,620.1Interest expense
    
    
    11,779.2
    
    
    
    11,983.1
    
    
    
    13,223.7Average interest-bearing liabilities
    
    
    175,598.6
    
    
    
    236,551.0
    
    
    
    298,276.8Average total assets
    
    
    257,020.8
    
    
    
    357,123.8
    
    
    
    448,029.6Average interest-earning assets as a percentage of average total assets
    
    
    89.7
    %
    
    
    91.7
    %
    
    
    94.8
    %Average interest-bearing liabilities as a percentage of average total
assets
    
    
    68.3
    %
    
    
    66.2
    %
    
    
    66.6
    %Average interest-earning assets as a percentage of average
interest-bearing liabilities
    
    
    131.2
    %
    
    
    138.5
    %
    
    
    142.4
    %Yield
    
    
    8.4
    %
    
    
    7.5
    %
    
    
    6.9
    %Cost of funds (1)
    
    
    5.1
    %
    
    
    3.6
    %
    
    
    3.2
    %Spread (2)
    
    
    2.7
    %
    
    
    3.5
    %
    
    
    3.5
    %Net interest margin (3)
    
    
    3.3
    %
    
    
    3.8
    %
    
    
    3.8
    %
 
 (1)
    
    Excludes shareholders equity.(2)
    
    Represents the difference between yield on average interest-earning assets and cost
of average interest-bearing liabilities. Yield on average interest-earning assets is the ratio
of interest revenue to average interest-earning assets. Cost of average 49




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##### Table of Contents



interest-bearing
liabilities is the ratio of interest expense to average interest-bearing liabilities. For
purposes of calculating spread, interest bearing liabilities include non-interest bearing
current accounts and cash floats from transactional services.(3)
    
    Net interest margin is the ratio of net interest revenue to average interest-earning
assets. The difference in net interest margin and spread arises due to the difference in
amount of average interest-earning assets and average interest-bearing liabilities. If average
interest-earning assets exceed average interest-bearing liabilities, net interest margin is
greater than spread. If average interest-bearing liabilities exceed average interest-earning
assets, net interest margin is less than spread. Returns on Equity and Assets
  Years ended March 31,2003
    
    2004
    
    2005(In millions, except percentages)Net income
    
    Rs.
    3,513.8
    
    
    Rs.
    4,754.5
    
    
    Rs.
    6,609.7Average total assets
    
    
    257,020.8
    
    
    
    357,123.8
    
    
    
    448,029.6Average shareholders equity
    
    
    24,087.0
    
    
    
    28,664.9
    
    
    
    40,764.1Net income as a percentage of average total assets
    
    
    1.4
    %
    
    
    1.3
    %
    
    
    1.5
    %Net income as a percentage of average shareholders equity
    
    
    14.6
    %
    
    
    16.6
    %
    
    
    16.2
    %Dividend payout ratio
    
    
    24.2
    %
    
    
    21.0
    %
    
    
    21.2
    %Average shareholders equity as a percentage of average total assets
    
    
    9.4
    %
    
    
    8.0
    %
    
    
    9.1
    %
 Investment Portfolio
 Available for Sale Investments
  At March 31,2003
    
    2004
    
    2005Gross
    
    Gross
    
    
    
    
    
    
    
    
    
    Gross
    
    Gross
    
    
    
    
    
    
    
    
    
    Gross
    
    GrossAmortized
    
    Unrealized
    
    Unrealized
    
    Fair
    
    Amortized
    
    Unrealized
    
    Unrealized
    
    Fair
    
    Amortized
    
    Unrealized
    
    Unrealized
    
    FairCost
    
    Gain
    
    Loss
    
    Value
    
    Cost
    
    Gain
    
    Loss
    
    Value
    
    Cost
    
    Gain
    
    Loss
    
    Value(In millions)Government
securities
    
    Rs.
    45,149.6
    
    
    Rs.
    784.8
    
    
    Rs.
    19.1
    
    
    Rs.
    45,915.3
    
    
    Rs.
    63,535.0
    
    
    Rs.
    1,426.9
    
    
    Rs.
    37.4
    
    
    Rs.
    64,924.5
    
    
    Rs.
    111,482.3
    
    
    Rs.
    1,017.4
    
    
    Rs.
    672.2
    
    
    Rs.
    111,827.5Other debt
securities
    
    
    29,357.8
    
    
    
    1,802.3
    
    
    
    186.7
    
    
    
    30,973.4
    
    
    
    30,554.7
    
    
    
    2,106.7
    
    
    
    101.1
    
    
    
    32,560.3
    
    
    
    39,320.6
    
    
    
    1,171.1
    
    
    
    181.1
    
    
    
    40,310.6Total debt
securities
    
    
    74,507.4
    
    
    
    2,587.1
    
    
    
    205.8
    
    
    
    76,888.7
    
    
    
    94,089.7
    
    
    
    3,533.6
    
    
    
    138.5
    
    
    
    97,484.8
    
    
    
    150,802.9
    
    
    
    2,188.5
    
    
    
    853.3
    
    
    
    152,138.1Non-debt securities
    
    
    21,649.8
    
    
    
    493.0
    
    
    
    102.3
    
    
    
    22,040.5
    
    
    
    35,083.4
    
    
    
    907.4
    
    
    
    201.0
    
    
    
    35,789.8
    
    
    
    51,930.2
    
    
    
    506.3
    
    
    
    281.8
    
    
    
    52,154.7Total
    
    Rs.
    96,157.2
    
    
    Rs.
    3,080.1
    
    
    Rs.
    308.1
    
    
    Rs.
    98,929.2
    
    
    Rs.
    129,173.1
    
    
    Rs.
    4,441.0
    
    
    Rs.
    339.5
    
    
    Rs.
    133,274.6
    
    
    Rs.
    202,733.1
    
    
    Rs.
    2,694.8
    
    
    Rs.
    1,135.1
    
    
    Rs.
    204,292.8
 50




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##### Table of Contents



Held to Maturity Investments
  At March 31,2003
    
    2004Gross
    
    Gross
    
    
    
    
    
    
    
    
    
    Gross
    
    GrossFair
    
    Unrealized
    
    Unrealized
    
    Amortized
    
    Fair
    
    Unrealized
    
    Unrealized
    
    AmortizedValue
    
    Gain
    
    Loss
    
    Cost
    
    Value
    
    Gain
    
    Loss
    
    Cost(In millions)Government securities
    
    Rs.
    20,392.6
    
    
    Rs.
    1,145.5
    
    
    Rs.
    7.3
    
    
    Rs.
    19,254.4
    
    
    Rs.
    28,424.2
    
    
    Rs.
    1,180.1
    
    
    Rs.
    1.1
    
    
    Rs.
    27,245.2Other debt securities
    
    
    19,715.7
    
    
    
    580.9
    
    
    
    37.5
    
    
    
    19,172.3
    
    
    
    9,633.4
    
    
    
    511.1
    
    
    
    0.9
    
    
    
    9,123.2Total debt securities
    
    
    40,108.3
    
    
    
    1,726.4
    
    
    
    44.8
    
    
    
    38,426.7
    
    
    
    38,057.6
    
    
    
    1,691.2
    
    
    
    2.0
    
    
    
    36,368.4Non-debt securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    Rs.
    40,108.3
    
    
    Rs.
    1,726.4
    
    
    Rs.
    44.8
    
    
    Rs.
    38,426.7
    
    
    Rs.
    38,057.6
    
    
    Rs.
    1,691.2
    
    
    Rs.
    2.0
    
    
    Rs.
    36,368.4
  Held for Trading Investments
  At March 31,2003
    
    2004
    
    2005Gross
    
    Gross
    
    
    
    
    
    
    
    
    
    Gross
    
    Gross
    
    
    
    
    
    
    
    
    
    Gross
    
    GrossAmortized
    
    Unrealized
    
    Unrealized
    
    Fair
    
    Amortized
    
    Unrealized
    
    Unrealized
    
    Fair
    
    Amortized
    
    Unrealized
    
    Unrealized
    
    FairCost
    
    Gain
    
    Loss
    
    Value
    
    Cost
    
    Gain
    
    Loss
    
    Value
    
    Cost
    
    Gain
    
    Loss
    
    Value(In millions)Government
securities
    
    Rs.
    3,783.4
    
    
    Rs.
    
    
    
    Rs.
    36.6
    
    
    Rs.
    3,746.8
    
    
    Rs.
    4,244.2
    
    
    Rs.
    25.0
    
    
    Rs.
    
    
    
    Rs.
    4,269.2
    
    
    Rs.
    1,278.5
    
    
    Rs.
    
    
    
    Rs.
    
    
    
    Rs.
    1,278.5Other debt
securities
    
    
    244.4
    
    
    
    
    
    
    
    15.1
    
    
    
    229.3
    
    
    
    1,986.6
    
    
    
    1.1
    
    
    
    23.1
    
    
    
    1,964.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total debt
securities
    
    
    4,027.8
    
    
    
    
    
    
    
    51.7
    
    
    
    3,976.1
    
    
    
    6,230.8
    
    
    
    26.1
    
    
    
    23.1
    
    
    
    6,233.8
    
    
    
    1,278.5
    
    
    
    
    
    
    
    
    
    
    
    1,278.5Non-debt
securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    Rs.
    4,027.8
    
    
    Rs.
    
    
    
    Rs.
    51.7
    
    
    Rs.
    3,976.1
    
    
    Rs.
    6,230.8
    
    
    Rs.
    26.1
    
    
    Rs.
    23.1
    
    
    Rs.
    6,233.8
    
    
    Rs.
    1,278.5
    
    
    Rs.
    
    
    
    Rs.
    
    
    
    Rs.
    1,278.5
 Residual
Maturity Profile
  At March 31, 2005Up to One Year
    
    One to Five Years
    
    Five to Ten Years
    

More than Ten YearsAmount
    
    Yield
    
    Amount
    
    Yield
    
    Amount
    
    Yield
    
    Amount
    
    Yield(In millions, except percentages)Government securities
    
    Rs.
    21,135.0
    
    
    
    6.9
    %
    
    Rs.
    41,046.1
    
    
    
    8.9
    %
    
    Rs.
    31,457.4
    
    
    
    7.5
    %
    
    Rs.
    18,189.0
    
    
    
    4.8
    %Other debt securities
    
    
    11,300.8
    
    
    
    6.5
    %
    
    
    25,323.1
    
    
    
    6.5
    %
    
    
    3,686.7
    
    
    
    5.8
    %
    
    
    
    
    
    
    Total debt
securities, fair value
    
    
    32,435.8
    
    
    
    6.6
    %
    
    
    66,369.2
    
    
    
    8.0
    %
    
    
    35,144.1
    
    
    
    7.3
    %
    
    
    18,189.0
    
    
    
    4.8
    %Total amortized cost
    
    Rs.
    32,319.6
    
    
    
    
    
    
    Rs.
    66,164.0
    
    
    
    
    
    
    Rs.
    34,569.4
    
    
    
    
    
    
    Rs.
    17,749.9
 Funding
  51




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##### Table of Contents



Total Deposits
  Years ended March 31,2003
    
    2004
    
    2005Amount
    
    % of total
    
    Amount
    
    % of total
    
    Amount
    
    % of total(In millions, except percentages)Current deposits(1)
    
    Rs.
    28,892.3
    
    
    
    15.5
    %
    
    Rs.
    61,803.3
    
    
    
    23.5
    %
    
    Rs.
    92,382.6
    
    
    
    27.0
    %Savings deposits
    
    
    36,419.7
    
    
    
    19.5
    
    
    
    61,535.8
    
    
    
    23.4
    
    
    
    97,026.4
    
    
    
    28.3Time deposits
    
    
    121,535.7
    
    
    
    65.0
    
    
    
    139,368.6
    
    
    
    53.1
    
    
    
    153,284.5
    
    
    
    44.7Total
    
    Rs.
    186,847.7
    
    
    
    100.0
    %
    
    Rs.
    262,707.7
    
    
    
    100.0
    %
    
    Rs.
    342,693.5
    
    
    
    100.0
    %
 
 (1)
    
    Includes current accounts and cash floats from transactional services.  At March 31, 2005Up to 3
    
    
    
    
    
    
    
    
    
    More than 1months
    
    3 to 6 months
    
    6 to 12 months
    
    year(In millions)Balance to
maturity for
deposits exceeding
Rs. 0.1 million
each
    
    Rs.
    14,199.5
    
    
    Rs.
    20,862.9
    
    
    Rs.
    14,781.9
    
    
    Rs.
    90,401.4
 Short-term Borrowings
  Years ended March 31,2003
    
    2004
    
    2005(In millions, except percentages)Period end balance
    
    Rs.
    21,579.6
    
    
    Rs.
    24,064.2
    
    
    Rs.
    62,079.1Average balance during the period
    
    Rs.
    15,362.9
    
    
    Rs.
    33,040.7
    
    
    Rs.
    42,594.6Maximum outstanding
    
    Rs.
    32,221.7
    
    
    Rs.
    52,274.3
    
    
    Rs.
    62,079.1Average interest rate during the period (1)
    
    
    6.7
    %
    
    
    4.3
    %
    
    
    4.1
    %Average interest rate at period end(2)
    
    
    6.9
    %
    
    
    4.1
    %
    
    
    4.3
    %
 
 (1)
    
    Represents the ratio of interest expense on short-term borrowings to the average of
daily balances of short-term borrowings.(2)
    
    Represents the weighted average rate of short-term borrowings outstanding as of
March 31, 2003, 2004 and 2005. Subordinated Debt
  52




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##### Table of Contents



Asset Liability Gap and Interest Sensitivity Data
  As of March 31, 20056-12
    
    Total within
    
    Greater thanOne Year
and
    
    Greater thanThree
Years and
    
    Greater than0-28 Days
    
    29-90 Days
    
    91-180 Days
    
    Months
    
    One Year
    

up to Three Years
    

up to Five Years
    

Five Years
    
    Total(In millions, except
percentages)Cash and cash
equivalents(2)(3)
    
    Rs.
    17,675.4
    
    
    Rs.
    1,952.4
    
    
    Rs.
    2,181.8
    
    
    Rs.
    2,145.4
    
    
    Rs.
    3,955.0
    
    
    Rs.
    12,948.3
    
    
    Rs.
    672.5
    
    
    Rs.
    
    
    
    Rs.
    37,575.8Term placements
    
    
    
    
    
    
    105.1
    
    
    
    771.0
    
    
    
    6,006.8
    
    
    
    6,882.9
    
    
    
    302.6
    
    
    
    478.0
    
    
    
    1,036.1
    
    
    
    8,699.6Investments held
for trading(4)
    
    
    1,189.0
    
    
    
    89.5
    
    
    
    
    
    
    
    
    
    
    
    1,278.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,278.5Investments
available for sale
(5)(6)
    
    
    7,077.8
    
    
    
    4,104.9
    
    
    
    9,814.3
    
    
    
    11,438.8
    
    
    
    32,435.8
    
    
    
    37,541.0
    
    
    
    28,828.3
    
    
    
    105,487.7
    
    
    
    204,292.8Loans, net (7) (8)
    
    
    45,457.9
    
    
    
    52,161.4
    
    
    
    18,062.4
    
    
    
    54,175.9
    
    
    
    169,857.6
    
    
    
    69,980.7
    
    
    
    14,834.8
    
    
    
    1,813.8
    
    
    
    256,486.9Accrued interest
receivable
    
    
    4,912.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,912.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,912.1Other assets
    
    
    6,854.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,854.3
    
    
    
    2,271.0
    
    
    
    
    
    
    
    
    
    
    
    9,125.3Total financial
assets
    
    Rs.
    83,166.5
    
    
    Rs.
    58,413.3
    
    
    Rs.
    30,829.5
    
    
    Rs.
    73,766.9
    
    
    Rs.
    246,176.2
    
    
    Rs.
    123,043.6
    
    
    Rs.
    44,813.6
    
    
    Rs.
    108,337.6
    
    
    Rs.
    522,371.0Deposits (9)
    
    
    39,316.2
    
    
    
    19,422.6
    
    
    
    21,047.7
    
    
    
    30,140.8
    
    
    
    109,927.3
    
    
    
    242,934.7
    
    
    
    10,680.5
    
    
    
    
    
    
    
    363,542.5Debt (10)
    
    
    51,765.2
    
    
    
    4,017.5
    
    
    
    6,156.8
    
    
    
    8.3
    
    
    
    61,947.8
    
    
    
    1,011.7
    
    
    
    147.7
    
    
    
    4,000.0
    
    
    
    67,107.2Other Liabilities
    
    
    49,466.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49,466.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49,466.5Total financial
liabilities
    
    Rs.
    140,547.9
    
    
    Rs.
    23,440.1
    
    
    Rs.
    27,204.5
    
    
    Rs.
    30,149.1
    
    
    Rs.
    221,341.6
    
    
    Rs.
    243,946.4
    
    
    Rs.
    10,828.2
    
    
    Rs.
    4,000.0
    
    
    Rs.
    480,116.2Asset/Liability Gap
    
    Rs.
    (57,381.4
    )
    
    Rs.
    34,973.2
    
    
    Rs.
    3,625.0
    
    
    Rs.
    43,617.8
    
    
    Rs.
    24,834.6
    
    
    Rs.
    (120,902.8
    )
    
    Rs.
    33,985.4
    
    
    Rs.
    104,337.6
    
    
    Rs.
    42,254.8Cumulative gap
    
    Rs.
    (57,381.4
    )
    
    Rs.
    (22,408.2
    )
    
    Rs.
    (18,783.2
    )
    
    Rs.
    24,834.6
    
    
    Rs.
    24,834.6
    
    
    Rs.
    (96,068.2
    )
    
    Rs.
    (62,082.8
    )
    
    Rs.
    42,254.8
    
    
    Rs.
    84,509.6Cumulative gap as
a percentage of total
financial assets
    
    
    (69.0
    )%
    
    
    (38.4
    )%
    
    
    (60.9
    )%
    
    
    33.7
    %
    
    
    10.1
    %
    
    
    (78.1
    )%
    
    
    (138.5
    )%
    
    
    39.0
    %
    
    
    16.2
    %
 
 (1)
    
    Assets and liabilities are classified into the applicable maturity categories based
on residual maturity unless specifically mentioned.(2)
    
    Cash on hand is classified in the 0-28 days category.(3)
    
    Cash and cash equivalents include balances with the RBI to satisfy its cash reserve
ratio requirements. These balances are held in the form of overnight cash deposits but we
classify these balances to the applicable maturity categories on a basis proportionate to the
classification of related deposits.(4)
    
    Securities in the trading book are classified in the 0-28 days or 29-90 days
categories based on the expected time of realization for such investments.(5)
    
    Securities held towards satisfying the statutory liquidity requirement (SLR)
prescribed by the RBI are classified based on the applicable maturity categories on a basis
proportionate to the classification of related deposits.(6)
    
    Shares are classified in the greater than five years category and units of open
ended mutual funds are classified in the 0-28 days category.(7)
    
    Includes net non-performing loans which are classified in the greater than five
years category.(8)
    
    Ambiguous maturity overdrafts are classified under various maturity categories based
on historical behavioral analyses that we have performed to determine the appropriate maturity
categorization of such advances.(9)
    
    Non-maturity deposits are classified under various maturity categories based on the
historical behavioral analysis that we have performed to determine the appropriate maturity
categorization of such deposits.(10)
    
    Includes short-term borrowings and long-term debt.  53




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##### Table of Contents



Loan Portfolio and Credit Substitutes
   At March 31,2001
    
    2002
    
    2003
    
    2004
    
    2005(In millions)Retail loans
    
    Rs.
    8,447.1
    
    
    Rs.
    14,301.3
    
    
    Rs.
    34,414.2
    
    
    Rs.
    73,251.6
    
    
    Rs.
    112,666.0Wholesale loans
    
    
    43,790.4
    
    
    
    58,833.5
    
    
    
    85,752.4
    
    
    
    107,923.8
    
    
    
    149,259.4Gross loans
    
    Rs.
    52,237.5
    
    
    Rs.
    73,134.8
    
    
    Rs.
    120,166.6
    
    
    Rs.
    181,175.4
    
    
    Rs.
    261,925.4Credit substitutes (at fair value)
    
    
    22,344.2
    
    
    
    35,329.9
    
    
    
    30,255.5
    
    
    
    17,041.5
    
    
    
    13,880.9Gross loans plus credit substitutes
    
    Rs.
    74,581.7
    
    
    Rs.
    108,464.7
    
    
    Rs.150,422.1
    
    Rs.
    198,216.9
    
    
    Rs.
    275,806.3
 Maturity and Interest Rate Sensitivity of Loans and Credit Substitutes
  At March 31, 2005Due in one
    
    Due in one
    
    Due afteryear or less
    
    to five years
    
    five years(In millions)Retail loans
    
    Rs.
    61,469.3
    
    
    Rs.
    49,352.0
    
    
    Rs.
    1,844.7Wholesale loans
    
    
    114,001.5
    
    
    
    31,032.6
    
    
    
    4,225.3Gross loans
    
    Rs.
    175,470.8
    
    
    Rs.
    80,384.6
    
    
    Rs.
    6,070.0Credit substitutes
    
    
    3,978.1
    
    
    
    7,130.0
    
    
    
    2,772.8Gross loans plus credit substitutes
    
    Rs.
    179,448.9
    
    
    Rs.
    87,514.6
    
    
    Rs.
    8,842.8
 54




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##### Table of Contents



At March 31, 2005Due in one
    
    Due in one
    
    Due afteryear or less
    
    to five years
    
    five years(In millions)Interest rate classification of loans by maturity:Variable rates
    
    Rs.
    1,940.3
    
    
    Rs.
    
    
    
    Rs.
    Fixed rates
    
    
    173,530.5
    
    
    
    80,384.6
    
    
    
    6,070.0Gross loans
    
    
    175,470.8
    
    
    
    80,384.6
    
    
    
    6,070.0Interest rate classification of credit substitutes by maturity:Variable rates
    
    
    250.0
    
    
    
    
    
    
    
    Fixed rates
    
    
    3,728.1
    
    
    
    7,130.0
    
    
    
    2,772.8Gross credit substitutes
    
    
    3,978.1
    
    
    
    7,130.0
    
    
    
    2,772.8Interest rate classification of loans and credit substitutes
by maturity:Variable rates
    
    
    2,190.3
    
    
    
    
    
    
    
    Fixed rates
    
    
    177,258.6
    
    
    
    87,514.6
    
    
    
    8,842.8Gross loans and credit substitutes
    
    Rs.
    179,448.9
    
    
    Rs.
    87,514.6
    
    
    Rs.
    8,842.8
 Concentration of Loans and Credit Substitutes
   At March 31,2001
    
    2002
    
    2003
    
    2004
    
    2005(In millions, except percentages)Land transport
    
    Rs.
    7.9
    
    
    
    0.0
    %
    
    Rs.
    1,298.5
    
    
    
    1.2
    %
    
    Rs.
    5,202.9
    
    
    
    3.5
    %
    
    Rs.
    15,396.2
    
    
    
    7.8
    %
    
    Rs.
    29,860.5
    
    
    
    10.8
    %Automotive manufacturers
    
    
    3,138.6
    
    
    
    4.2
    
    
    
    9,999.2
    
    
    
    9.2
    
    
    
    13,393.2
    
    
    
    8.9
    
    
    
    19,370.2
    
    
    
    9.8
    
    
    
    26,100.0
    
    
    
    9.5Telecommunications
    
    
    1,393.6
    
    
    
    1.9
    
    
    
    2,490.1
    
    
    
    2.3
    
    
    
    921.0
    
    
    
    0.6
    
    
    
    4,054.0
    
    
    
    2.0
    
    
    
    9,586.9
    
    
    
    3.5Hire Purchase(1)
    
    
    2,394.7
    
    
    
    3.2
    
    
    
    5,367.0
    
    
    
    4.9
    
    
    
    5,877.1
    
    
    
    3.9
    
    
    
    4,498.5
    
    
    
    2.3
    
    
    
    6,912.5
    
    
    
    2.5Iron and Steel
    
    
    1,191.5
    
    
    
    1.6
    
    
    
    2,456.0
    
    
    
    2.3
    
    
    
    2,270.2
    
    
    
    1.5
    
    
    
    4,258.8
    
    
    
    2.1
    
    
    
    5,750.7
    
    
    
    2.1Others (including
unclassified retail)
    
    
    66,455.4
    
    
    
    89.1
    
    
    
    86,853.9
    
    
    
    80.1
    
    
    
    122,757.7
    
    
    
    81.6
    
    
    
    150,639.2
    
    
    
    76.0
    
    
    
    197,595.7
    
    
    
    71.6Total
    
    Rs.
    74,581.7
    
    
    
    100.0
    %
    
    Rs.
    108,464.7
    
    
    
    100.0
    %
    
    Rs.
    150,422.1
    
    
    
    100.0
    %
    
    Rs.
    198,216.9
    
    
    
    100.0
    %
    
    Rs.
    275,806.3
    
    
    
    100.0
    %
 
 (1)
    
    Hire purchase is similar to leasing. Our customers in the hire purchase business purchase goods on behalf of their clients, and their clients make
regularly scheduled payments to them over a specified period of time; ownership of the purchased
goods automatically transfers to the clients after full payment under a hire purchase agreement.  55




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##### Table of Contents



Directed Lending
    At March 31,2001
    
    2002
    
    2003
    
    2004
    
    2005(In millions)Directed lending:Agriculture
    
    Rs.
    1,206.8
    
    
    Rs.
    1,493.4
    
    
    Rs.
    8,858.8
    
    
    Rs.
    13,220.2
    
    
    Rs.
    20,641.5Small scale industries
    
    
    1,772.8
    
    
    
    2,730.5
    
    
    
    2,949.6
    
    
    
    4,370.6
    
    
    
    4,013.2Other
    
    
    3,788.6
    
    
    
    3,509.2
    
    
    
    2,372.6
    
    
    
    7,633.3
    
    
    
    32,519.8Total directed lending
    
    Rs.
    6,768.2
    
    
    Rs.
    7,733.1
    
    
    Rs.
    14,181.0
    
    
    Rs.
    25,224.1
    
    
    Rs.
    57,174.5
 Non-Performing Loans
    56




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##### Table of Contents



As of March 31,2001
    
    2002
    
    2003
    
    2004
    
    2005(In millions, except percentages)Non-performing loans:Retail loans
    
    Rs.
    93.3
    
    
    Rs.
    140.7
    
    
    Rs.
    74.9
    
    
    Rs.
    403.5
    
    
    Rs.
    1,663.3Wholesale loans
    
    
    1,403.0
    
    
    
    1,819.2
    
    
    
    2,292.7
    
    
    
    2,589.1
    
    
    
    2,420.9Gross non-performing loans
    
    Rs.
    1,496.3
    
    
    Rs.
    1,959.9
    
    
    Rs.
    2,367.6
    
    
    Rs.
    2,992.6
    
    
    Rs.
    4,084.2Specific valuation allowances
    
    Rs.
    1,010.8
    
    
    Rs.1,423.5
    
    Rs.
    1,684.3
    
    
    Rs.
    2,722.7
    
    
    Rs.
    3,492.8Unallocated valuation allowances
    
    
    143.5
    
    
    
    182.4
    
    
    
    182.4
    
    
    
    771.6
    
    
    
    1,945.7Non-performing loans net of
specific valuation allowance
    
    
    485.5
    
    
    
    536.4
    
    
    
    683.3
    
    
    
    269.9
    
    
    
    591.4Gross loan assets
    
    
    52,237.5
    
    
    
    73,134.8
    
    
    
    120,166.6
    
    
    
    181,175.4
    
    
    
    261,925.4Net loan assets
    
    Rs.
    51,083.2
    
    
    Rs.
    71,528.9
    
    
    Rs.
    118,299.9
    
    
    Rs.
    177,681.1
    
    
    Rs.
    256,486.9Gross non-performing loans as a
percentage of gross loans
    
    
    2.86
    %
    
    
    2.68
    %
    
    
    1.97
    %
    
    
    1.65
    %
    
    
    1.56
    %Non-performing loans net of
specific valuation allowance as a
percentage of net loan assets
    
    
    0.95
    %
    
    
    0.74
    %
    
    
    0.58
    %
    
    
    0.15
    %
    
    
    0.23
    %Specific valuation allowance as
a percentage of gross
non-performing loans
    
    
    67.55
    %
    
    
    72.63
    %
    
    
    71.14
    %
    
    
    90.98
    %
    
    
    85.52
    %Total valuation allowance as a
percentage of gross non-performing
loans
    
    
    77.14
    %
    
    
    81.94
    %
    
    
    78.84
    %
    
    
    116.76
    %
    
    
    133.16
    %
 Recognition of Non-Performing Loans
    At March 31,2001
    
    2002
    
    2003
    
    2004
    
    2005(In millions)Performing
    
    Rs.
    50,741.2
    
    
    Rs.
    71,174.9
    
    
    Rs.
    117,799.0
    
    
    Rs.
    178,182.8
    
    
    Rs.
    257,841.2Non-performing or impaired:On accrual status
    
    
    235.4
    
    
    
    61.6
    
    
    
    51.9
    
    
    
    
    
    
    
    On non-accrual status
    
    
    1,260.9
    
    
    
    1,898.3
    
    
    
    2,315.7
    
    
    
    2,992.6
    
    
    
    4,084.2Total non-performing or impaired
    
    
    1,496.3
    
    
    
    1,959.9
    
    
    
    2,367.6
    
    
    
    2,992.6
    
    
    
    4,084.2Total
    
    Rs.
    52,237.5
    
    
    Rs.
    73,134.8
    
    
    Rs.
    120,166.6
    
    
    Rs.
    181,175.4
    
    
    Rs.
    261,925.4
  57




---



##### Table of Contents



Retail Loans
    Wholesale Loans
    58




---



##### Table of Contents



59




---



##### Table of Contents



Analysis of Non-Performing Loans by Industry Sector
  As of March 312001
    
    2002
    
    2003
    
    2004
    
    2005Non
performing
    
    % ofloans in
    
    
    
    
    
    Non
performing
    
    % ofloans in
    
    
    
    
    
    Non
performing
    
    % ofloans in
    
    
    
    
    
    Non
performing
    
    % ofloans in
    
    
    
    
    
    Non
performing
    
    % ofloans inGross Loans
    
    loans
    
    industry
    
    Gross Loans
    
    loans
    
    industry
    
    Gross Loans
    
    loans
    
    industry
    
    Gross Loans
    
    loans
    
    industry
    
    Gross Loans
    
    loans
    
    industry(In millions, except percentages)Consumer electronics
    
    Rs.
    186.7
    
    
    Rs.
    50.1
    
    
    
    5.8
    
    
    Rs.
    960.8
    
    
    
    23.5
    
    
    
    2.5
    
    
    Rs.
    1,754.6
    
    
    Rs.
    207.8
    
    
    
    11.9
    
    
    Rs.
    2,261.1
    
    
    Rs.
    639.1
    
    
    
    28.3
    
    
    Rs.
    3,452.7
    
    
    Rs.
    679.4
    
    
    
    19.7Diamond, gems and jewelry
exports
    
    
    862.6
    
    
    
    129.3
    
    
    
    15.0
    
    
    
    1,029.4
    
    
    
    131.5
    
    
    
    12.8
    
    
    
    1,343.4
    
    
    
    130.9
    
    
    
    9.8
    
    
    
    1,473.8
    
    
    
    129.1
    
    
    
    8.8
    
    
    
    1,401.7
    
    
    
    129.1
    
    
    
    9.2Textiles
    
    
    641.9
    
    
    
    331.4
    
    
    
    51.6
    
    
    
    457.3
    
    
    
    396.0
    
    
    
    86.6
    
    
    
    698.5
    
    
    
    372.0
    
    
    
    53.3
    
    
    
    1,327.6
    
    
    
    356.2
    
    
    
    26.8
    
    
    
    3,483.9
    
    
    
    239.5
    
    
    
    6.9Fertilizers
    
    
    2,540.5
    
    
    
    28.3
    
    
    
    1.1
    
    
    
    1,706.2
    
    
    
    72.8
    
    
    
    4.3
    
    
    
    3,760.4
    
    
    
    30.2
    
    
    
    0.8
    
    
    
    1,974.7
    
    
    
    22.6
    
    
    
    1.2
    
    
    
    2,882.3
    
    
    
    122.9
    
    
    
    4.3Iron and steel
    
    
    1,072.4
    
    
    
    207.4
    
    
    
    19.3
    
    
    
    937.6
    
    
    
    440.1
    
    
    
    46.9
    
    
    
    1,141.8
    
    
    
    437.3
    
    
    
    38.3
    
    
    
    3,616.6
    
    
    
    440.4
    
    
    
    12.2
    
    
    
    4,840.2
    
    
    
    201.5
    
    
    
    4.2Miscellaneous industries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    675.7
    
    
    
    5.6
    
    
    
    0.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,221.0
    
    
    
    123.3
    
    
    
    2.9Electrical machinery
    
    
    1,121.9
    
    
    
    49.4
    
    
    
    4.4
    
    
    
    1,853.4
    
    
    
    66.2
    
    
    
    3.6
    
    
    
    1,430.8
    
    
    
    76.1
    
    
    
    5.3
    
    
    
    1,376.6
    
    
    
    76.1
    
    
    
    5.5
    
    
    
    2,428.9
    
    
    
    66.9
    
    
    
    2.8Construction
    
    
    651.3
    
    
    
    23.5
    
    
    
    3.6
    
    
    
    67.6
    
    
    
    23.5
    
    
    
    34.8
    
    
    
    207.5
    
    
    
    23.4
    
    
    
    11.3
    
    
    
    27.5
    
    
    
    21.9
    
    
    
    79.6
    
    
    
    385.3
    
    
    
    10.5
    
    
    
    2.7Automotive manufacturers
    
    
    1,831.9
    
    
    
    41.7
    
    
    
    2.3
    
    
    
    8,856.0
    
    
    
    41.9
    
    
    
    0.5
    
    
    
    12,096.3
    
    
    
    642.9
    
    
    
    5.3
    
    
    
    18,541.1
    
    
    
    653.7
    
    
    
    3.5
    
    
    
    25,667.6
    
    
    
    654.3
    
    
    
    2.5Electricity generation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    486.0
    
    
    
    26.8
    
    
    
    5.5
    
    
    
    1,577.1
    
    
    
    26.8
    
    
    
    1.7
    
    
    
    759.5
    
    
    
    26.8
    
    
    
    3.5
    
    
    
    1,620.3
    
    
    
    26.8
    
    
    
    1.7Retail advances not
otherwise classified
    
    
    8,447.1
    
    
    
    10.1
    
    
    
    0.1
    
    
    
    14,273.1
    
    
    
    134.1
    
    
    
    0.9
    
    
    
    28,848.6
    
    
    
    74.9
    
    
    
    0.3
    
    
    
    63,207.8
    
    
    
    382.1
    
    
    
    0.6
    
    
    
    103,681.2
    
    
    
    1,544.8
    
    
    
    1.6Heavy engineering
    
    
    2,533.4
    
    
    
    184.7
    
    
    
    7.3
    
    
    
    1,640.2
    
    
    
    147.9
    
    
    
    9.0
    
    
    
    2,581.3
    
    
    
    56.1
    
    
    
    2.2
    
    
    
    6,050.0
    
    
    
    56.1
    
    
    
    0.9
    
    
    
    4,862.3
    
    
    
    56.1
    
    
    
    1.2Drugs
and pharmaceuticals
    
    
    877.1
    
    
    
    36.5
    
    
    
    4.2
    
    
    
    1,442.1
    
    
    
    133.8
    
    
    
    9.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,039.5
    
    
    
    40.0
    
    
    
    1.3
    
    
    
    3,917.6
    
    
    
    42.9
    
    
    
    1.1Glass and glass products
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    135.9
    
    
    
    11.0
    
    
    
    8.1
    
    
    
    419.8
    
    
    
    9.1
    
    
    
    2.2
    
    
    
    814.5
    
    
    
    9.1
    
    
    
    1.1Other wholesale trade
    
    
    517.0
    
    
    
    43.1
    
    
    
    8.3
    
    
    
    1,174.2
    
    
    
    46.2
    
    
    
    3.9
    
    
    
    1,882.8
    
    
    
    43.4
    
    
    
    2.3
    
    
    
    2,526.6
    
    
    
    40.9
    
    
    
    1.6
    
    
    
    4,465.9
    
    
    
    40.9
    
    
    
    0.9Paper and paper products
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    806.6
    
    
    
    70.3
    
    
    
    8.7
    
    
    
    1,701.4
    
    
    
    11.7
    
    
    
    0.7Activities allied to dairying
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,091.0
    
    
    
    3.4
    
    
    
    0.1
    
    
    
    3,144.4
    
    
    
    3.4
    
    
    
    0.1
    
    
    
    3,946.7
    
    
    
    3.4
    
    
    
    0.1Traders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,484.8
    
    
    
    2.1
    
    
    
    0.1
    
    
    
    200.1
    
    
    
    3.4
    
    
    
    1.7
    
    
    
    1,738.0
    
    
    
    2.5
    
    
    
    0.1Land transport
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,396.2
    
    
    
    21.4
    
    
    
    0.1
    
    
    
    29,860.5
    
    
    
    118.5
    
    
    
    0.4Manufacture of metal products
    
    
    298.2
    
    
    
    21.7
    
    
    
    7.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    897.9
    
    
    
    3.4
    
    
    
    0.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Share brokers
    
    
    1,748.0
    
    
    
    105.0
    
    
    
    6.0
    
    
    
    639.5
    
    
    
    7.4
    
    
    
    1.2
    
    
    
    823.9
    
    
    
    6.7
    
    
    
    0.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Investment and finance and
leasing
    
    
    777.0
    
    
    
    40.7
    
    
    
    5.2
    
    
    
    79.2
    
    
    
    40.7
    
    
    
    51.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other chemicals
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    455.2
    
    
    
    61.6
    
    
    
    13.5
    
    
    
    469.1
    
    
    
    51.9
    
    
    
    11.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Activities allied to
agriculture
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15.2
    
    
    
    15.2
    
    
    
    100.0
    
    
    
    216.5
    
    
    
    16.4
    
    
    
    7.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Plastic and plastic products
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15.9
    
    
    
    3.1
    
    
    
    19.5
    
    
    
    26.9
    
    
    
    3.2
    
    
    
    11.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Distilleries
    
    
    196.0
    
    
    
    154.0
    
    
    
    78.6
    
    
    
    147.6
    
    
    
    147.6
    
    
    
    100.0
    
    
    
    191.0
    
    
    
    142.1
    
    
    
    74.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Manufacture of rubber and
rubber products
    
    
    279.6
    
    
    
    39.4
    
    
    
    14.1
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    
    
    
    Rs.
    1,496.3
    
    
    
    
    
    
    
    
    
    
    Rs.
    1,959.9
    
    
    
    
    
    
    
    
    
    
    Rs.
    2,367.6
    
    
    
    
    
    
    
    
    
    
    Rs.
    2,992.6
    
    
    
    
    
    
    
    
    
    
    Rs.
    4,084.2Specific allowance for
credit losses
    
    
    
    
    
    Rs.
    1,010.8
    
    
    
    
    
    
    
    
    
    
    Rs.
    1,423.5
    
    
    
    
    
    
    
    
    
    
    Rs.
    1,684.3
    
    
    
    
    
    
    
    
    
    
    Rs.
    2,722.7
    
    
    
    
    
    
    
    
    
    
    Rs.
    3,492.8Non-performing loans, net
    
    
    
    
    
    Rs.
    485.5
    
    
    
    
    
    
    
    
    
    
    Rs.
    536.4
    
    
    
    
    
    
    
    
    
    
    Rs.
    683.3
    
    
    
    
    
    
    
    
    
    
    Rs.
    269.9
    
    
    
    
    
    
    
    
    
    
    Rs.
    591.4
  Consumer electronics
  Textiles
  60




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##### Table of Contents



Diamond Gems and Jewelry
  Top Ten Non-Performing Loans
   At March 31, 2005Principaloutstanding net
    
    
    
    
    
    CurrentlyType of
    
    Gross
    
    of allowance
    
    
    
    
    
    servicingbanking
    
    principal
    
    for credit
    
    Collateral-
    
    all interestIndustry
    
    arrangement
    
    outstanding
    
    losses
    
    our share
    
    payments(1)(In millions)Borrower A
    
    Automotive manufacturers
    
    Sole
    
    Rs.
    642.9
    
    
    Rs.
    
    
    
    Rs.
    
    
    
    NoBorrower B
    
    Consumer electronics
    
    Consortium
    
    
    639.1
    
    
    
    
    
    
    
    
    
    
    NoBorrower C
    
    Diamond gems and jewelry export
    
    Consortium
    
    
    129.1
    
    
    
    
    
    
    
    
    
    
    NoBorrower D
    
    Textiles
    
    Consortium
    
    
    120.8
    
    
    
    
    
    
    
    
    
    
    NoBorrower E
    
    Iron and steel
    
    Consortium
    
    
    109.7
    
    
    
    
    
    
    
    
    
    
    NoBorrower F
    
    Fertilizers
    
    Consortium
    
    
    100.3
    
    
    
    64.2
    
    
    
    64.2
    
    
    NoBorrower G
    
    Iron and steel
    
    Consortium
    
    
    82.4
    
    
    
    
    
    
    
    
    
    
    NoBorrower H
    
    Textiles
    
    Multiple
    
    
    73.0
    
    
    
    
    
    
    
    
    
    
    NoBorrower I
    
    Miscellaneous industry
    
    Consortium
    
    
    63.8
    
    
    
    
    
    
    
    
    
    
    NoBorrower J
    
    Miscellaneous industry
    
    Sole
    
    
    59.5
    
    
    
    59.5
    
    
    
    310.8
    
    
    NoTotal
    
    
    
    
    
    Rs.
    2,020.6
    
    
    Rs.
    123.7
    
    
    Rs.
    375.0
 
 (1)
    
    We classify loans as non-performing once we determine that the payment of interest or
principal is doubtful. Since the classification may occur even before the borrower defaults,
some of our non-performing loans other than our ten largest non performing loans are currently
servicing all interest payments. Interest Foregone
  Interest foregone
    

(In millions)March 31, 2003
    
    Rs.
    334.0March 31, 2004
    
    
    274.2March 31, 2005
    
    
    216.7
 61




---



##### Table of Contents



Restructuring of Non-Performing Loans
    At March 31,2001
    
    2002
    
    2003
    
    2004
    
    2005(In millions, except percentages)Gross restructured loans
    
    Rs.
    502.1
    
    
    Rs.
    172.2
    
    
    Rs.
    2.7
    
    
    Rs.
    
    
    
    Rs.
    100.3Allowance for credit losses
    
    
    320.5
    
    
    
    119.3
    
    
    
    2.7
    
    
    
    
    
    
    
    36.1Net restructured loans
    
    Rs.
    181.6
    
    
    Rs.
    52.9
    
    
    Rs.
    
    
    
    Rs.
    
    
    
    Rs.
    64.2Gross
restructured loans as a percentage of gross non-performing loans
    
    
    33.6
    %
    
    
    8.8
    %
    
    
    0.1
    %
    
    
    
    
    
    
    2.5
    %Net
restructured loans as a percentage of net non-performing loans
    
    
    37.4
    %
    
    
    2.7
    %
    
    
    
    
    
    
    
    
    
    
    10.9
    %
  Non-Performing Loan Strategy
  62




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##### Table of Contents



Allowance for Credit Losses on Loans
  For the years ended March 31,2001
    
    2002
    
    2003
    
    2004
    
    2005(In millions)Specific allowance for credit losses at the beginning of the
period
    
    Rs.
    763.8
    
    
    Rs.1,010.8
    
    Rs.
    1,423.5
    
    
    Rs.
    1,684.3
    
    
    Rs.
    2,722.7Additions to allowance for credit losses for the period :Retail
    
    
    201.9
    
    
    
    366.5
    
    
    
    156.3
    
    
    
    775.8
    
    
    
    2,433.9Wholesale
    
    
    137.7
    
    
    
    253.8
    
    
    
    786.8
    
    
    
    1,278.7
    
    
    
    221.9Less allowances no longer required on account of recoveries
    
    
    (92.6
    )
    
    
    (207.6
    )
    
    
    (201.6
    )
    
    
    (300.3
    )
    
    
    (781.7
    )Net expense for additions to specific allowance for credit
    
    
    247.0
    
    
    
    412.7
    
    
    
    741.5
    
    
    
    1,754.2
    
    
    
    1,874.1Allowance no longer required on account of write offs
    
    
    
    
    
    
    
    
    
    
    (480.7
    )
    
    
    (715.8
    )
    
    
    (1,104.0
    )Specific allowance for credit losses at the end of period
    
    Rs.1,010.8
    
    Rs.1,423.5
    
    Rs.
    1,684.3
    
    
    Rs.2,722.7
    
    Rs.
    3,492.8Unallocated allowance for credit losses at the beginning of the
period
    
    Rs.
    143.5
    
    
    Rs.
    143.5
    
    
    Rs.
    182.4
    
    
    Rs.
    182.4
    
    
    Rs.
    771.6Additions during the period
    
    
    
    
    
    
    38.9
    
    
    
    
    
    
    
    589.2
    
    
    
    1,174.10Unallocated allowance for credit losses at the end of the period
    
    Rs.
    143.5
    
    
    Rs.
    182.4
    
    
    Rs.
    182.4
    
    
    Rs.
    771.6
    
    
    Rs.
    1,945.7Total allowance for credit losses at the beginning of the period
    
    Rs.
    907.3
    
    
    Rs.
    1,154.3
    
    
    Rs.
    1,605.9
    
    
    Rs.
    1,866.7
    
    
    Rs.
    3,494.3Allowance no longer required on account of write-offs
    
    
    
    
    
    
    
    
    
    
    (480.7
    )
    
    
    (715.8
    )
    
    
    (1,104.0
    )Net addition to total allowance for the period charged to expense
    
    
    247.0
    
    
    
    451.6
    
    
    
    741.5
    
    
    
    2,343.4
    
    
    
    3,048.2Total allowance for credit losses at the end of the period
    
    Rs.1,154.3
    
    Rs.
    1,605.9
    
    
    Rs.
    1,866.7
    
    
    Rs.
    3,494.3
    
    
    Rs.
    5,438.5
  As of March 31,2001
    
    2002
    
    2003
    
    2004
    
    2005WholesaleAllocated
    
    Rs.
    877.8
    
    
    Rs.
    1,289.7
    
    
    Rs.
    1,609.4
    
    
    Rs.
    2,379.8
    
    
    Rs.
    2,285.7Unallocated
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    269.8
    
    
    
    400.9Subtotal
    
    Rs.
    877.8
    
    
    Rs.
    1,289.7
    
    
    Rs.
    1,609.4
    
    
    Rs.
    2,649.6
    
    
    Rs.
    2,686.6RetailAllocated
    
    Rs.
    94.1


    Rs.
    133.8
    
    
    Rs.
    74.9
    
    
    Rs.
    342.9
    
    
    Rs.
    1,207.1Unallocated
    
    
    182.4
    
    
    
    182.4
    
    
    
    182.4
    
    
    
    501.8
    
    
    
    1,544.8Subtotal
    
    Rs.
    276.5
    
    
    Rs.
    316.2
    
    
    Rs.
    257.3
    
    
    Rs.
    844.7
    
    
    Rs.
    2,751.9Allowance for credit losses
    
    Rs.1,154.3
    
    Rs.1,605.9
    
    Rs.1,866.7
    
    Rs.
    3,494.3
    
    
    Rs.
    5,438.5
 63




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##### Table of Contents



MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
 You should read the following discussion and analysis of our financial condition and
results of operations together with our audited financial statements included in this report. The
following discussion is based on our audited financial statements, which have been prepared in
accordance with U.S. GAAP, and on information publicly available from the RBI and other sources.
 Overview
      64




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##### Table of Contents



Critical Accounting Policies
  Allowance for loan losses
  Retail Loans
  Wholesale
    65




---



##### Table of Contents



Interest Accrual and Revenue Recognition
      Valuation of Investments
     66




---



##### Table of Contents



New Accounting Pronouncements
 Share based payment
       67




---



##### Table of Contents



Other-than-temporary impairments of securities
  Loans
or debt securities acquired in a transfer
  68




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##### Table of Contents



Fiscal Year Ended March 31, 2005 Compared to Fiscal Year Ended March 31, 2004
 Net Interest Revenue after Allowance for Credit Losses
  Year ended March 31,Increase/
    
    
    % Increase/2004
    
    
    2005
    
    
    (decrease)
    
    
    (decrease)(In millions, except percentages)Interest on loans
    
    Rs.
    11,705.0
    
    
    Rs.
    16,431.4
    
    
    Rs.
    4,726.4
    
    
    
    40.4
    %Interest on securities, including dividends
    
    
    11,776.9
    
    
    
    11,543.5
    
    
    
    (233.4
    )
    
    
    (2.0
    )Other interest revenue
    
    
    1,109.6
    
    
    
    1,234.5
    
    
    
    124.9
    
    
    
    11.3Total interest and dividend revenue
    
    
    24,591.5
    
    
    
    29,209.4
    
    
    
    4,617.9
    
    
    
    18.8Interest on deposits
    
    
    10,279.2
    
    
    
    11,074.1
    
    
    
    794.9
    
    
    
    7.7Interest on
short-term borrowings
    
    
    1,435.9
    
    
    
    1,759.4
    
    
    
    323.5
    
    
    
    22.5Interest on
long-term debt
    
    
    268.0
    
    
    
    390.2
    
    
    
    122.2
    
    
    
    45.6Total interest expense
    
    
    11,983.1
    
    
    
    13,223.7
    
    
    
    1,240.6
    
    
    
    10.4Net interest revenue
    
    
    12,608.4
    
    
    
    15,985.7
    
    
    
    3,377.3
    
    
    
    26.8Allowance for credit lossesRetail
    
    
    918.5
    
    
    
    2,925.5
    
    
    
    2,007.0
    
    
    
    218.5Wholesale
    
    
    1,424.9
    
    
    
    122.7
    
    
    
    (1,302.2
    )
    
    
    (91.4
    )Total
    
    
    2,343.4
    
    
    
    3,048.2
    
    
    
    704.8
    
    
    
    30.1Net interest revenue after allowance for
credit losses
    
    Rs.
    10,265.0
    
    
    Rs.
    12,937.5
    
    
    Rs.
    2,672.5
    
    
    
    26.0
    %
 Interest and Dividend Revenue
   69




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##### Table of Contents



Interest Expense
   Allowance for Credit Losses
  Non-Interest revenue
  Year ended March 31,Increase/
    
    
    % Increase/2004
    
    
    2005
    
    
    (decrease)
    
    
    (decrease)(In millions, except percentages)Fees and commissions
    
    Rs.
    3,140.7
    
    
    Rs.
    6,124.4
    
    
    Rs.
    2,983.7
    
    
    
    95.0
    %Realized gains (losses)
on sales of AFS
securities
    
    
    (48.3
    )
    
    
    194.3
    
    
    
    242.6
    
    
    
    (502.3
    )Realized gains (losses)
on sales of HFT
securities
    
    
    396.8
    
    
    
    (39.3
    )
    
    
    (436.1
    )
    
    
    (109.9
    )Foreign exchange
    
    
    740.0
    
    
    
    911.7
    
    
    
    171.7
    
    
    
    23.2Derivative transactions
    
    
    443.9
    
    
    
    204.0
    
    
    
    (239.9
    )
    
    
    (54.0
    )Other
    
    
    24.5
    
    
    
    816.4
    
    
    
    791.9
    
    
    
    3,232.0Total non-interest revenue
    
    Rs.
    4,697.6
    
    
    Rs.
    8,211.5
    
    
    Rs.
    3,513.9
    
    
    
    74.8
    %
  70




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##### Table of Contents



Non-Interest expense
  Year ended March 31,Increase/
    
    
    % Increase/
    
    
    2004 % of
    
    
    2005 % of2004
    
    
    2005
    
    
    (decrease)
    
    
    (decrease)
    
    
    net revenues
    
    
    net revenues(In millions)Salaries and staff benefits
    
    Rs.
    2,154.0
    
    
    Rs.
    3,249.9
    
    
    Rs.
    1,095.9
    
    
    
    50.9
    %
    
    
    14.4
    %
    
    
    15.4
    %Premises and equipment
    
    
    1,828.5
    
    
    
    2,260.8
    
    
    
    432.3
    
    
    
    23.6
    
    
    
    12.2
    
    
    
    10.7Depreciation and amortization
    
    
    1,254.9
    
    
    
    1,440.7
    
    
    
    185.8
    
    
    
    14.8
    
    
    
    8.4
    
    
    
    6.8Administrative and other
    
    
    3,131.9
    
    
    
    4,462.5
    
    
    
    1,330.6
    
    
    
    42.5
    
    
    
    20.9
    
    
    
    21.1Total non-interest expense
    
    Rs.
    8,369.3
    
    
    Rs.
    11,413.9
    
    
    Rs.
    3,044.6
    
    
    
    36.4
    %
    
    
    55.9
    %
    
    
    54.0
    %
   Income Tax
  Net Income
  71




---



##### Table of Contents



Fiscal Year Ended March 31, 2004 Compared to Fiscal Year Ended March 31, 2003
 Net Interest Revenue After Allowance For Credit Losses
  Year ended March 31,Increase/
    
    
    % Increase/2003
    
    
    2004
    
    
    (decrease)
    
    
    (decrease)(In millions, except percentages)Interest on loans
    
    Rs.
    7,805.3
    
    
    Rs.
    11,705.0
    
    
    Rs.
    3,899.7
    
    
    
    50.0
    %Interest on securities, including dividends
    
    
    10,386.1
    
    
    
    11,776.9
    
    
    
    1,390.8
    
    
    
    13.4Other interest revenue
    
    
    1,233.4
    
    
    
    1,109.6
    
    
    
    (123.8
    )
    
    
    (10.0
    )Total interest and dividend revenue
    
    
    19,424.8
    
    
    
    24,591.5
    
    
    
    5,166.7
    
    
    
    26.6Interest on deposits
    
    
    10,508.5
    
    
    
    10,279.2
    
    
    
    (229.3
    )
    
    
    (2.2
    )Interest on
short-term borrowings
    
    
    1,032.9
    
    
    
    1,435.9
    
    
    
    403.0
    
    
    
    39.0Interest on
long-term debt
    
    
    237.8
    
    
    
    268.0
    
    
    
    30.2
    
    
    
    12.7Total interest expense
    
    
    11,779.2
    
    
    
    11,983.1
    
    
    
    203.9
    
    
    
    1.7Net interest revenue
    
    
    7,645.6
    
    
    
    12,608.4
    
    
    
    4,962.8
    
    
    
    64.9Allowance for credit lossesRetail
    
    
    181.8
    
    
    
    918.5
    
    
    
    736.7
    
    
    
    405.2Wholesale
    
    
    559.7
    
    
    
    1,424.9
    
    
    
    865.2
    
    
    
    154.6Total
    
    
    741.5
    
    
    
    2,343.4
    
    
    
    1,601.9
    
    
    
    216.0Net interest revenue after allowance for
credit losses
    
    Rs.
    6,904.1
    
    
    Rs.
    10,265.0
    
    
    Rs.
    3,360.9
    
    
    
    48.7
    %
 Interest and Dividend Revenue
   72




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##### Table of Contents



Interest Expense
    Allowance for Credit Losses
  Non-Interest Revenue
  Year ended March 31,Increase/
    
    
    % Increase/2003
    
    
    2004
    
    
    (decrease)
    
    
    (decrease)(In millions, except percentages)Fees and commissions
    
    Rs.
    2,306.4
    
    
    Rs.
    3,140.7
    
    
    Rs.
    834.3
    
    
    
    36.2
    %Realized gains (losses)
on sales of AFS
securities
    
    
    721.7
    
    
    
    (48.3
    )
    
    
    (770.0
    )
    
    
    (106.7
    )Realized gains (losses)
on sales of HFT
securities
    
    
    507.8
    
    
    
    396.8
    
    
    
    (111.0
    )
    
    
    (21.9
    )Foreign exchange
    
    
    445.3
    
    
    
    740.0
    
    
    
    294.7
    
    
    
    66.2Derivative transactions
    
    
    379.1
    
    
    
    443.9
    
    
    
    64.8
    
    
    
    17.1Other
    
    
    37.0
    
    
    
    24.5
    
    
    
    (12.5
    )
    
    
    (33.8
    )Total non-interest revenue
    
    Rs.
    4,397.3
    
    
    Rs.
    4,697.6
    
    
    Rs.
    300.3
    
    
    
    6.8
    %
   73




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##### Table of Contents



Non-Interest Expense
  Year ended March 31,Increase/
    
    
    % Increase/
    
    
    2003 % of net
    
    
    2004 % of net2003
    
    
    2004
    
    
    (decrease)
    
    
    (decrease)
    
    
    revenues
    
    
    revenues(In millions, except percentages)Salaries and staff benefits
    
    Rs.
    1,661.2
    
    
    Rs.
    2,154.0
    
    
    Rs.
    492.8
    
    
    
    29.7
    %
    
    
    14.7
    %
    
    
    14.4
    %Premises and equipment
    
    
    1,343.6
    
    
    
    1,828.5
    
    
    
    484.9
    
    
    
    36.1
    
    
    
    11.9
    
    
    
    12.2Depreciation and amortization
    
    
    1,052.4
    
    
    
    1,254.9
    
    
    
    202.5
    
    
    
    19.2
    
    
    
    9.3
    
    
    
    8.4Administrative and other
    
    
    2,000.7
    
    
    
    3,131.9
    
    
    
    1,131.2
    
    
    
    56.5
    
    
    
    17.7
    
    
    
    20.9Total non-interest expense
    
    Rs.
    6,057.9
    
    
    Rs.
    8,369.3
    
    
    Rs.
    2,311.4
    
    
    
    38.2
    %
    
    
    53.6
    %
    
    
    55.9
    %
  Income Tax
  Net Income
  Liquidity and Capital Resources
   74




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##### Table of Contents



Years ended March 31,2003
    
    
    2004
    
    
    2005(In millions)Cash flows from operating activities:Net income
    
    Rs.
    3,513.8
    
    
    Rs.
    4,754.5
    
    
    Rs.
    6,609.7Non cash adjustment to net income
    
    
    1,394.6
    
    
    
    4,515.6
    
    
    
    5,021.2Subtotal
    
    
    4,908.4
    
    
    
    9,270.1
    
    
    
    11,630.9Net change in other assets and liabilities
    
    
    9,579.1
    
    
    
    30,985.8
    
    
    
    (9,886.2
    )Net cash provided/(used) by operating activities
    
    
    14,487.5
    
    
    
    40,255.9
    
    
    
    1,744.7Cash flows from investing activities:Net change in term placements
    
    
    (7,747.4
    )
    
    
    4,182.2
    
    
    
    (5,134.3
    )Net change in Investment
    
    
    (14,051.0
    )
    
    
    (57,535.2
    )
    
    
    (17,516.4
    )Proceeds from loans securitized
    
    
    
    
    
    
    5,917.4
    
    
    
    48,234.6Increase in loans originated, net of principal collections
    
    
    (47,512.5
    )
    
    
    (67,765.8
    )
    
    
    (129,466.1
    )Additions to property and equipment
    
    
    (2,517.3
    )
    
    
    (2,119.0
    )
    
    
    (2,433.3
    )Net cash used in investing activities
    
    
    (71,828.2
    )
    
    
    (117,320.4
    )
    
    
    (106,315.5
    )Cash flows from financing activities:Net increase in deposits
    
    
    47,221.9
    
    
    
    80,302.0
    
    
    
    59,480.5Net increase/(decrease) in short-term borrowings
    
    
    (20.7
    )
    
    
    2,484.6
    
    
    
    38,014.9Net
increase/(decrease) in long-term debt
    
    
    (41.9
    )
    
    
    3,970.0
    
    
    
    (1,057.9
    )Proceeds from issuance of equity shares for options
exercised
    
    
    86.7
    
    
    
    203.6
    
    
    
    659.1Proceeds from issuance of ADSs
    
    
    
    
    
    
    
    
    
    
    12,747.6Proceeds from applications received for shares pending
allotment
    
    
    146.5
    
    
    
    125.5
    
    
    
    423.3Payment of dividends and dividend tax
    
    
    (697.5
    )
    
    
    (955.7
    )
    
    
    (1,131.3
    )Net cash provided by financing activities
    
    
    46,695.0
    
    
    
    86,130.0
    
    
    
    109,136.2Net change in cash
    
    
    (10,645.7
    )
    
    
    9,065.5
    
    
    
    4,565.4Cash and cash equivalents, beginning of year
    
    
    34,590.6
    
    
    
    23,944.9
    
    
    
    33,010.4Cash and cash equivalents, end of year
    
    Rs.
    23,944.9
    
    
    Rs.
    33,010.4
    
    
    Rs.
    37,575.8
 Cash flows from operations
  75




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##### Table of Contents



Cash flows from financing activities
    Cash flows from investing activities
  76




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##### Table of Contents



Financial Condition
 Assets
  Increase/
    
    
    % Increase/As of March 31,
    
    
    (decrease)
    
    
    (decrease)2004
    
    
    2005(In millions except percentages)Cash and cash equivalents
    
    Rs.
    33,010.4
    
    
    Rs.
    37,575.8
    
    
    Rs.
    4,565.4
    
    
    
    13.8
    %Term placements
    
    
    3,565.2
    
    
    
    8,699.6
    
    
    
    5,134.4
    
    
    
    144.0Investments held for trading
    
    
    6,233.8
    
    
    
    1,278.5
    
    
    
    (4,955.3
    )
    
    
    (79.5
    )Investments available for sale
    
    
    133,274.6
    
    
    
    204,292.8
    
    
    
    71,018.2
    
    
    
    53.3Investments held to maturity
    
    
    36,368.4
    
    
    
    
    
    
    
    (36,368.4
    )
    
    
    (100.0
    )Securities purchased under
agreements to resell
    
    
    19,950.0
    
    
    
    
    
    
    
    (19,950.0
    )
    
    
    (100.0
    )Loans, net
    
    
    177,681.1
    
    
    
    256,486.9
    
    
    
    78,805.8
    
    
    
    44.4Accrued interest receivable
    
    
    4,178.7
    
    
    
    4,912.1
    
    
    
    733.4
    
    
    
    17.6Property and equipment
    
    
    6,169.1
    
    
    
    7,083.2
    
    
    
    914.1
    
    
    
    14.8Other assets
    
    
    6,404.3
    
    
    
    9,125.3
    
    
    
    2,721.0
    
    
    
    42.5Total assets
    
    Rs.
    426,835.6
    
    
    Rs.
    529,454.2
    
    
    Rs.
    102,618.6
    
    
    
    24.0
    %
    
  Transfers Within Investment Portfolio
  77




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##### Table of Contents



Liabilities and Shareholders Equity
  Increase/
    
    
    % Increase/As of March 31,
    
    
    (decrease)
    
    
    (decrease)2004
    
    
    2005(In millions except percentages)LiabilitiesInterest bearing deposits
    
    Rs.
    215,710.8
    
    
    Rs.
    257,237.9
    
    
    Rs.
    41,527.1
    
    
    
    19.3
    %Non-interest bearing deposits
    
    
    88,351.2
    
    
    
    106,304.6
    
    
    
    17,953.4
    
    
    
    20.3Total deposits
    
    
    304,062.0
    
    
    
    363,542.5
    
    
    
    59,480.5
    
    
    
    19.6Short-term borrowings
    
    
    24,064.2
    
    
    
    62,079.1
    
    
    
    38,014.9
    
    
    
    158.0Accrued interest payable
    
    
    4,165.4
    
    
    
    5,843.0
    
    
    
    1,677.6
    
    
    
    40.3Long-term debt
    
    
    6,086.0
    
    
    
    5,028.1
    
    
    
    (1,057.9
    )
    
    
    (17.4
    )Accrued expenses and other liabilities
    
    
    57,242.2
    
    
    
    43,623.5
    
    
    
    (13,618.7
    )
    
    
    (23.8
    )Total liabilities
    
    
    395,619.8
    
    
    
    480,116.2
    
    
    
    84,496.4
    
    
    
    21.4Shareholders equity
    
    
    31,215.8
    
    
    
    49,338.0
    
    
    
    18,122.2
    
    
    
    58.1Total liabilities and shareholders
equity
    
    Rs.
    426,835.6
    
    
    Rs.
    529,454.2
    
    
    Rs.
    102,618.6
    
    
    
    24.0
    %
      Capital
  78




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##### Table of Contents



As of March 31,2004
    
    
    2005(In millions, except percentages)Tier 1 capital
    
    Rs.
    22,297.0
    
    
    Rs.
    39,621.6Tier 2 capital
    
    
    10,081.2
    
    
    
    10,547.3Total capital
    
    
    32,378.2
    
    
    
    50,168.9Total risk weighted assets and contingents
    
    Rs.
    277,738.2
    
    
    Rs.
    412,710.3Capital ratios:Tier 1
    
    
    8.03
    %
    
    
    9.60
    %Total capital
    
    
    11.66
    %
    
    
    12.16
    %Minimum capital ratios required by the RBI:Tier 1
    
    
    4.50
    %
    
    
    4.50
    %Total capital
    
    
    9.00
    %
    
    
    9.00
    %
     79




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##### Table of Contents



Capital Expenditure
  Financial Instruments and Off-Balance Sheet Arrangements
 Foreign Exchange and Derivatives
   As of March 31,2004
    
    
    2005Notional
    
    
    Fair Value
    
    
    Notional
    
    
    Fair Value(In millions)Interest rate swaps and forward rate agreements
    
    Rs.
    343,913.7
    
    
    Rs.
    (15.4
    )
    
    Rs.
    780,211.6
    
    
    Rs.
    (79.7
    )Forward exchange contracts, currency swaps and
currency options
    
    
    439,917.00
    
    
    
    503.3
    
    
    
    571,445.0
    
    
    
    731.2
  Guarantees and Documentary Credits
  80




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##### Table of Contents



As of March 31,2004
    
    
    2005(In millions)Bank guarantees:Financial guarantees
    
    Rs.
    7,497.0
    
    
    Rs.
    14,365.4Performance guarantees
    
    
    8,916.8
    
    
    
    9,954.4Documentary credits
    
    
    18,921.0
    
    
    
    27,930.2Total
    
    Rs.
    35,334.8
    
    
    Rs.
    52,250.0
  Loan Sanction Letters
  Contractual Obligations and Commercial Commitments
 Contractual Obligations
 Payments due by periodLess than
    
    
    
    
    
    
    
    
    
    
    AfterTotal
    
    
    1 year
    
    
    1-3 years
    
    
    4-5 years
    
    
    5 years(In millions)Subordinated debt
    
    Rs.
    5,000.0
    
    
    Rs.
    
    
    
    Rs.
    1,000.0
    
    
    Rs.
    
    
    
    Rs.
    4,000.0Other long-term debt(1)
    
    
    28.2
    
    
    
    19.5
    
    
    
    6.6
    
    
    
    2.2
    
    
    
    Operating leases(2)
    
    
    7,417.0
    
    
    
    1,019.7
    
    
    
    2,962.5
    
    
    
    2,501.1
    
    
    
    933.6Unconditional purchase
obligations(3)
    
    
    497.5
    
    
    
    497.5
    
    
    
    
    
    
    
    
    
    
    
    Total contractual cash obligations
    
    Rs.
    12,942.7
    
    
    Rs.
    1,536.7
    
    
    Rs.
    3,969.1
    
    
    Rs.
    2,503.3
    
    
    Rs.
    4,933.6
 (1)
    
    Other long-term debt consists of capital lease obligations of Rs. 17.2 million
pertaining to assets taken on leases, such as ATMs, VSATs and other equipment, which we
assumed at the time of our merger with Times Bank in 2000, and Rs. 11.0 million being a
concessional loan from an agency for the purchase of solar power panels.(2)
    
    Operating leases are principally for the lease of office, branch and ATM premises, and
residential premises for executives. 81




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##### Table of Contents



(3)
    
    Unconditional purchase obligations principally constitute the capital expenditure
commitments made as of March 31, 2005. See  Capital Expenditures. Commercial Commitments
    Commitment expiration per periodTotal amounts
    
    
    Less than
    
    
    
    
    
    
    
    
    
    
    More than 5committed
    
    
    1 year
    
    
    1-3 years
    
    
    4-5 years
    
    
    years(In millions)Documentary Credits
    
    Rs.
    27,930.2
    
    
    Rs.
    27,930.2
    
    
    Rs.
    
    
    
    Rs.
    
    
    
    Rs.
    Guarantees
    
    
    24,319.3
    
    
    
    19,612.6
    
    
    
    3,429.8
    
    
    
    359.3
    
    
    
    917.7Forward exchange contracts
    
    
    533,981.8
    
    
    
    528,410.5
    
    
    
    5,098.3
    
    
    
    473.0
    
    
    
    Derivative contracts*
    
    
    815,342.5
    
    
    
    124,567.3
    
    
    
    395,948.7
    
    
    
    292,842.1
    
    
    
    1,984.4Total contractual cash obligations
    
    Rs. 1,401,573.8
    
    Rs.
    700,520.5
    
    
    Rs.
    404,476.7
    
    
    Rs.
    293,674.5
    
    
    Rs.
    2,902.1
 *
    
    Denotes notional principal amounts. 82




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##### Table of Contents



MANAGEMENT
 Directors and Executive Officers
       83




---



##### Table of Contents



Name
    
    Position
    
    AgeMr. Jagdish Capoor
    
    Chairman
    
    
    65Mr. Aditya Puri
    
    Managing Director
    
    
    55Mr. Anil Ahuja *
    
    Non-Executive Director
    
    
    43Dr.
V. R. Gadwal **
    
    Non-Executive Director
    
    
    67Mr. Vineet Jain
    
    Non-Executive Director
    
    
    39Mr.
K. M. Mistry **
    
    Non-Executive Director
    
    
    51Mrs.
Renu Karnad**
    
    Non-Executive Director
    
    
    53Mr. Arvind Pande
    
    Non-Executive Director
    
    
    63Mr. Bobby Parikh
    
    Non-Executive Director
    
    
    41Mr. Ranjan Kapur
    
    Non-Executive Director
    
    
    63Mr. Ashim Samanta
    
    Non-Executive Director
    
    
    51
 *
    
    Resigned as of June 17, 2005.**
    
    Are liable to retire by rotation in the forthcoming annual
general meeting.  Name
    
    Position
    
    AgeMr. Aditya Puri
    
    Managing Director
    
    
    54Mr. Vinod G. Yennemadi
    
    Head, Finance, Administration,
Legal and Secretarial
    
    
    63Mr. Samir Bhatia
    
    Head, Corporate Banking
    
    
    42Mr. Harish Engineer
    
    Head, Wholesale Banking
    
    
    57Mr. Sudhir Joshi
    
    Head, Treasury
    
    
    58Mr. C. N. Ram
    
    Head, Information Technology
    
    
    48Mr. Bharat Shah
    
    Head, Depositary Services and
Merchant Services
    
    
    58Mr. G. Subramanian
    
    Head, Audit, Compliance,
Vigilance and Service Quality
    
    
    57Mr. Paresh Sukthankar
    
    Head, Credit and Market Risk and
Human Resources
    
    
    42Mr. Neeraj Swaroop*
    
    Head, Retail Banking
    
    
    46Mr. A. Rajan
    
    Head, Operations
    
    
    53Mr. Abhay Aima
    
    Head, Equities and Private Banking
    
    
    43
 *
    
    Resigned as of August 10, 2005.   Mr. Jagdish Capoor
 84




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##### Table of Contents



Mr. Aditya Puri
 Mr. Anil Ahuja
 Dr. V. R. Gadwal
 Mr. Vineet Jain inter alia,
 Mr. K. M. Mistry inter alia,
 Mrs. Renu Karnad inter alia,
 85




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##### Table of Contents



Mr. Arvind Pande inter alia,
 Mr. Bobby Parikh
 Mr. Ranjan Kapur
 Mr. Ashim Samanta
  Mr. Vinod G. Yennemadi
 Mr. Samir Bhatia
 Mr. Harish Engineer
 Mr. Sudhir Joshi
 86




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##### Table of Contents



Mr. C. N. Ram
 Mr. Bharat Shah
 Mr. G. Subramanian
 Mr. Paresh Sukthankar
 Mr. Neeraj Swaroop
 Mr. A. Rajan
 Mr. Abhay Aima
 Corporate Governance
 Audit
and Compliance Committee
  87




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##### Table of Contents




    
    Overseeing the Banks financial reporting process and ensuring correct, adequate and credible disclosure of financial
information;
 
    
    Recommending appointment and removal of external auditors and fixing of their fees;
 
    
    Reviewing with management the annual financial statements before submission to the Board with special emphasis on
accounting policies and practices, compliance with accounting standards and other legal requirements concerning
financial statements; and
 
    
    Reviewing the adequacy of the Audit and Compliance function, including their policies, procedures, techniques and other
regulatory requirements.
  Compensation
Committee
    Investors
Grievance (Share) Committee
       88




---



##### Table of Contents



Risk
Monitoring Committee
    Credit
Approval Committee
   Premises
Committee
   Nomination
Committee
    89




---



##### Table of Contents



Fraud
Monitoring Committee
  
    
    Identify the systems lacunae, if any, that facilitated perpetration of the fraud and put in place measures to prevent
the same;
 
    
    Identify the reasons for delay in detection, if any, reporting to top management of the Bank and the RBI;
 
    
    Monitor the progress of CBI and police investigations and recoveries;
 
    
    Ensure that staff accountability is examined at all levels in
all cases of fraud and that staff side action, if required, is
completed quickly without loss of time;
 
    
    Review the efficacy of remedial action taken to prevent recurrence of fraud, such as strengthening internal controls;
 
    
    Put in place other measures as may be considered relevant to strengthen preventive measures against fraud.
   Customer
Service Committee
    Committees
of Executives
  Borrowing Powers of Directors
  90




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##### Table of Contents



Compensation of Directors and Executive Officers
   91




---



##### Table of Contents



Loans to Executive Officers
 Largest amount
    
    
    Amount
    
    
    Interestoutstanding
    
    
    outstanding as of
    
    
    rate as ofName
    

in
fiscal 2005
    
    
    31-Mar-05
    
    
    31-Mar-05
    
    
    Nature of Loan(In millions, except percentages)Abhay Aima
    
    Rs.
    1.6
    
    
    Rs.
    1.6
    
    
    
    8.5
    %
    
    Housing loan0.1
    
    
    
    
    
    
    
    
    
    
    Personal loanAditya Puri
    
    
    5.0
    
    
    
    5.0
    
    
    
    8.5
    
    
    Housing loanA. Rajan
    
    
    5.0
    
    
    
    5.0
    
    
    
    8.5
    
    
    Housing loan0.5
    
    
    
    0.4
    
    
    
    5.0
    
    
    Personal LoanBharat Shah
    
    
    4.1
    
    
    
    3.9
    
    
    
    8.5
    
    
    Housing loanG. Subramanian
    
    
    4.2
    
    
    
    4.1
    
    
    
    8.5
    
    
    Housing loan0.5
    
    
    
    0.4
    
    
    
    5.0
    
    
    Personal loanHarish Engineer
    
    
    2.3
    
    
    
    2.3
    
    
    
    8.5
    
    
    Housing loanNeeraj Swaroop *
    
    
    3.0
    
    
    
    3.0
    
    
    
    8.5
    
    
    Housing loan0.2
    
    
    
    0.1
    
    
    
    5.0
    
    
    Personal loanParesh Sukthankar
    
    
    4.0
    
    
    
    
    
    
    
    
    
    
    Housing loanSamir Bhatia
    
    
    4.5
    
    
    
    4.5
    
    
    
    8.5
    
    
    Housing loan0.1
    
    
    
    0.1
    
    
    
    5.0
    
    
    Personal loanVinod Yennemadi
    
    
    2.1
    
    
    
    2.1
    
    
    
    8.5
    
    
    Housing loanTotal
    
    Rs.
    37.2
    
    
    Rs.
    32.5
 *
    
    No longer an executive officer of the Bank. 92




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##### Table of Contents



Employees Stock Option Scheme
  Other Compensation
  Controls and procedures
 Evaluation
of disclosure controls and procedures
  Changes
in internal controls
  Audit committee financial expert
  93




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##### Table of Contents



Code of ethics
   Principal Accountant Fees and Services
  Type of Service
    
    Fiscal year ended March 31,
    
    Description of Services2004
    
    2005(In millions)Audit services
    
    Rs.
    3.9
    
    
    Rs.
    3.9
    
    
    Audit of financial statementsAudit related services
    
    
    1.7
    
    
    
    1.1
    
    
    Services related to review of
financial statements and due
diligenceTax fees
    
    
    0.1
    
    
    
    
    
    
    Tax audit, tax returns, tax
processing, tax filing and
advisory servicesOther services
    
    
    0.6
    
    
    
    0.2
    
    
    Statutory certifications,
quality registrar services,
work permit related services
and other advisory servicesRs.
    6.3
    
    
    Rs.
    5.2
  Compliance with NYSE Listing Standards on Corporate Governance
  94




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##### Table of Contents



NYSE rule applicable toU.S. listed companies
    
    Indian law and HDFC Bank's practiceCompanies must have a
majority of independent
directors. (NYSE Corporate
Governance Standard 303A.01)
    
    Under Indian law, if the chairman of the
board of directors is not an executive
officer of the company, at least one
third of the directors should be
independent. If the chairman is an
executive officer, at least 50% of the
companys directors should be
independent. The chairman of our board
of directors is not an executive officer
and 7 out of 10 members of the board are
independent.Certain heightened standards
apply to independent
directors. (NYSE Corporate
Governance Standard 303A.02)
    
    Under Indian law, a director is
independent so long as he or she does
not have any material pecuniary
relationship or transactions (apart from
directors remuneration) with the
company, its promoters, its management
or its subsidiaries, which in the
judgment of the board may affect the
independence or judgment of the
director. We apply the Indian definition
of independent. Under that definition,
the board considers Mr. Jagdish Capoor,
the chairman of the board, to be
independent.Non-management directors must
meet at regularly scheduled
executive sessions without
management. (NYSE Corporate
Governance Standard 303A.03)
    
    Under Indian law, there is no
requirement for such sessions. HDFC Bank
does not regularly hold such meetings.Companies must have a
nominating/corporate governance
committee composed entirely of
independent directors. (NYSE
Corporate Governance Standard
303A.04)
    
    Under Indian law, a nominating/corporate
governance committee is not required.
However, HDFC Bank has a Nomination
Committee that is responsible for
recommending the appointment of
independent/non-executive directors to
the board of directors. The Nomination
Committee is composed of four
non-executive directors, all of whom are
independent.
 95




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##### Table of Contents



NYSE rule applicable toU.S. listed companies
    
    Indian law and HDFC Bank's practiceThe nominating/corporate
governance committee must have a
written charter that addresses
certain specific committee
purposes and responsibilities
and provides for an annual
performance evaluation of the
committee. (NYSE Corporate
Governance Standard 303A.04)
    
    Since Indian law does not require a
nominating/corporate governance
committee, it also does not require a
charter for such a committee. As a
result, we have no such charter.Companies must have a
compensation committee composed
entirely of independent
directors. (NYSE Corporate
Governance Standard 303A.05)
    
    Under Indian law, a companys board of
directors sets the compensation for
non-executive directors. Non-mandatory
Indian law recommends that companies
establish a remuneration committee
composed of non-executive directors and
an independent chairman to determine the
compensation of executive directors.
HDFC Bank has a Compensation Committee
of four non-executive directors, all of
whom are independent.The compensation committee must
have a written charter that
addresses certain specific
purposes and responsibilities of
the committee and provides for
an annual performance evaluation
of the committee. (NYSE
Corporate Governance Standard
303A.05)
    
    Indian law does not require that the
compensation committee have a charter.
HDFC Bank does not have such a charter.Companies must have an audit
committee that satisfies the
independence requirements of
Rule 10A-3 under the Exchange
Act and the requirements of NYSE
Corporate Governance Standard
303A.02. (NYSE Corporate
Governance Standards 303A.06 and
303A.07)
    
    An audit committee is required under
Indian Law. HDFC Bank has an Audit and
Compliance Committee composed of four
non-executive directors, all of whom are
independent. The committees chairman is
independent.The audit committee must have a
written charter that addresses
certain specific purposes and
responsibilities of the
committee, provides for an
annual performance evaluation of
the committee and sets forth
certain minimum duties and
responsibilities. (NYSE
Corporate Governance Standard
303A.07)
    
    HDFC Bank has a written audit committee
charter that provides for specific
purposes and responsibilities.Companies must adopt and
disclose corporate governance
guidelines. (NYSE Corporate
Governance Standard 303A.09)
    
    Indian law does not require the adoption
and disclosure of corporate governance
guidelines. However, information with
respect to corporate governance can be
found in our annual report for 2004-2005
under the heading Corporate
Governance.Companies must adopt and
disclose a code of business
conduct and ethics for
directors, officers and
employees, and promptly disclose
any waivers of the code for
directors or executive officers.
(NYSE Corporate Governance
Standard 303A.10)
    
    As required by SEBI regulations, HDFC
Bank has adopted a code governing
trading in the companys securities by
insiders. In addition, HDFC Bank has
adopted a Code of Ethics for the
Managing Director, CFO and Senior
Management of the company.
 96




---



##### Table of Contents



Memorandum and Articles of Association
       97




---



##### Table of Contents



PRINCIPAL SHAREHOLDERS
  
    
    each person or group of affiliated persons known by us to
beneficially own 5.0% or more of our equity shares; and
 
    
    our individual directors and officers.
   Percentage ofTotal EquityNumber of
    
    
    SharesEquity Shares
    
    
    OutstandingHDFC group
    
    
    68,861,000
    (1)
    
    
    22.2Bennett Coleman group
    
    
    16,192,408
    (2)
    
    
    5.2Directors and executive officers
    
    
    
    
    
    
    *
 
 (1)
    
    Includes: 38,860,000 equity shares held directly by HDFC Limited, 30,000,000 equity
shares held by HDFC Investments Limited and 1,000 equity shares held by HDFC Holdings Limited.
HDFC Investments Limited and HDFC Holdings Limited are controlled by HDFC Limited.(2)
    
    Includes: 8,849,929 equity shares held by Bennett Coleman & Company Limited, 2,486,956
equity shares held by Dharmayug Investments Limited and 4,855,523 equity shares held by other
Bennett Coleman group entities.(*)
    
    None of our directors or executive officers individually holds 1% or more of our total equity
shares outstanding. 98




---



##### Table of Contents



RELATED PARTY TRANSACTIONS
   HDFC Securities Ltd (HSL)
  HDFC Limited
 Housing Loans
  Property
  HDFC Standard Life Insurance Company Ltd (HDFC Standard Life)
  99




---



##### Table of Contents



HDFC Asset Management Company Ltd (HDFC AMC)
  HDFC Chubb General Insurance Company Ltd (HDFC Chubb)
  Atlas Documentary Facilitators Company Private Ltd (ADFC)
  HBL Global Private Ltd (HBL Global)
  Flexcel International Private Ltd (Flexcel)
  Salisbury Investments Private Ltd
  Other Strategic Investments
  100




---



##### Table of Contents



HDFC Bank
    
    HDFC Bank
    
    Total HDFCCompany
    
    Type of Business
    
    Investment
    
    Ownership
    
    Group ownership(In millions)Computer Age
Management Services
Private
Limited
(CAMS)
    
    Unit capital
accounting and
transfer agency
services
    
    Rs. 6.1
    
    
    
    19.0
    %
    
    
    49.0
    %SolutionNET
India Private Limited
    
    Information
technology
consulting and
services
    
    7.6
    
    
    
    19.0
    
    
    
    50.0Softcell
Technologies
Limited
(Softcell)
    
    Business-to-business software services
    
    26.0

    
    
    
    12.0
    
    
    
    26.0
   101




---



##### Table of Contents



TAXATION
 Indian Taxation of the ADSs
  EACH INVESTOR IS ADVISED TO CONSULT THEIR TAX ADVISOR ABOUT THE PARTICULAR TAX CONSEQUENCES
APPLICABLE ON INVESTMENTS IN THE ADSs.
   Taxation
of Distributions
  Taxation
on Acquisition of ADSs or Shares Upon Conversion or in Exchange for
ADSs
  Taxation
of Capital Gains
  102




---



##### Table of Contents



Tax
Deduction at Source
  Capital
Losses
  103




---



##### Table of Contents



Tax
Treaties
   Stamp
Duty
   Other
Taxes
  Service
Tax
  United
States Tax
   104




---



##### Table of Contents




    
    insurance companies;
 
    
    regulated investment companies and real estate investment trusts;
 
    
    tax-exempt organizations;
 
    
    broker-dealers:
 
    
    traders in securities that elect to mark to market;
 
    
    banks or other financial institutions;
 
    
    investors whose functional currency is not the United States dollar;
 
    
    United States expatriates;
 
    
    investors that hold our equity shares or ADSs as part of a hedge, straddle or conversion transaction;
 
    
    holders that purchase or otherwise acquire equity shares or ADSs other than through this offering; or
 
    
    holders that own, directly, indirectly, or constructively 10.0% or more of our total combined voting stock.
   Taxation
of U.S. Holders
  
    
    a citizen or resident of the United States;
 
    
    a corporation, or any other entity taxable as a corporation,
created or organized in or under the laws of the United States or
any state thereof, including the District of Columbia;
 
    
    an estate the income of which is subject to United States federal
income tax regardless of its source; or
 
    
    a trust if a court within the United States is able to exercise
primary supervision over its administration and one or more United
States persons have the authority to control all substantial
decisions of the trust, or if the trust has made a valid election
to be treated as a United States person.
    105




---



##### Table of Contents



Distributions
on Equity Shares or ADSs
    Sale
or Exchange of Equity Shares or ADSs
  106




---



##### Table of Contents



Passive
Foreign Investment Company Rules
  Taxation of Non-U.S. Holders
 Distributions
on Equity Shares or ADSs
  Sale
or Exchange of Equity Shares or ADSs
  
    
    such gain is considered effectively connected with the Non-U.S.
Holders conduct of a United States trade or business (and, if
required by an applicable income tax treaty, the income is
attributable to a permanent establishment maintained in the United
States); or
 
    
    if such Non-U.S. Holder is an individual that is present in the
United States for 183 days or more during the taxable year of the
disposition and certain other conditions are met.
 107




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##### Table of Contents



Backup
Withholding and Information Reporting
  
    
    is a corporation or other exempt recipient; or
 
    
    provides an accurate taxpayer identification number and
certifies that no loss of exemption from backup withholding
has occurred.
   108




---



##### Table of Contents



SUPERVISION AND REGULATION
  RBI Regulations
   Regulations Relating to the Opening of Branches
     109




---



##### Table of Contents



Capital Adequacy Requirements
      110




---



##### Table of Contents




    
    securities included under the HFT category;
 
    
    securities included under the AFS category;
 
    
    open positions in bullion;
 
    
    open foreign exchange position limits;
 
    
    trading positions in derivatives; and
 
    
    derivatives entered into for hedging trading book exposures.
  Loan Loss Provisions and Non-Performing Assets
   Non-Performing Assets
  Asset Classification
  
    
    Standard Assets - Assets that do not have any problems or do not carry more than the normal risk attached
to the business
 
    
    Sub-Standard Assets - Assets that are non-performing assets for a period not exceeding 12 months.
 
    
    Doubtful Assets - Assets that are non-performing assets for 12 months or more and have not been written
off, either wholly or partially.
 
    
    Loss Assets - Assets that are considered uncollectible and identified as a loss by us, the RBI or our
external auditors.
  111




---



##### Table of Contents



Provisioning and Write-Offs
  
    
    Standard Assets -  A general provision of 0.25% of loans and advances is required.
 
    
    Sub-Standard Assets - A general provision of 10% on the total outstanding is required without any allowance for ECGC
guarantee cover and securities available. The unsecured exposures, which are identified as sub-standard, would attract
an additional provision of 10% i.e. a total of 20% on the outstanding balance.
 
    
    Doubtful Assets - A 100% specific provision is required to be taken against the unsecured portion of the doubtful asset
and charged against income. The value assigned to the collateral securing a loan is the amount reflected on the
borrowers books or the realizable value determined by third-party appraisers. In cases where there is a secured
portion of the asset, depending upon the period for which the asset remains doubtful, an additional 20% to 50%
provision of the loan outstanding is required to be made against the secured asset as follows:
 ü
 ü
 ü
 
    
    Loss Assets - The entire asset is required to be written off or provided for.
  Act Relating to Recovery of Non-Performing Assets
  Guidelines Relating to the Purchase and Sale of Non-Performing Assets
  Draft Guidelines Relating to Securitization of Standard Assets
  112




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##### Table of Contents



Regulations Relating to Making Loans
  
    
    The RBI has prescribed norms for bank lending to non-bank financial companies.
 
    
    Banks are free to determine their own lending rates but each bank must declare its prime lending rate as approved by
its board of directors. The prime lending rate is a reference or benchmark rate for banks, and banks can offer loans at
below prime lending rates. The interest charged by banks on advances of up to Rs. 200,000 to any one entity (other than
most consumer banking loans) must not exceed the prime lending rate. Interest rates in specified categories of advances
are regulated by the RBI. The benchmark prime lending rate must take into account the banks actual cost of funds,
operating expenses, a minimum margin to cover regulatory requirements of provisioning, capital charge and profit
margin. The pricing for borrowers would be arrived at by adding time-varying term premiums, risk premiums and other
cost elements.
 
    
    There are guidelines on loans against shares in respect of amount, margin and purpose.
 Directed Lending
 Priority Sector Lending
   
    
    credit to small scale industrial units which are entities engaged
in manufacturing, processing and providing services and whose
investment in plant and machinery does not exceed Rs. 10 million
(Rs. 50 million in respect of certain specified small scale
industrial units);
 
    
    credit to small scale service and businesses enterprises;
 
    
    advances to small businesses including small road and water
transport operators, retail traders and professional &
self-employed persons;
 
    
    educational loans granted to individuals for educational purposes
as well as other loans to the weaker sections of society;
 
    
    direct home loans up to Rs. 1.5 million disbursed in rural,
semi-urban, urban and metropolitan areas as well as investment in
mortgage-backed securities satisfying prescribed conditions; and
 
    
    other bonds and debentures, which qualify for priority sector
status, as set forth by the government and the RBI.
   113




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Export Credit
  Credit Exposure Limits
    
    
    all approved fund-based limits or outstandings (whichever are higher);
 
    
    investments in shares, debentures and commercial papers of companies and public sector undertakings;
 
    
    approved non-fund-based limits, underwriting and similar
commitments or outstandings, whichever is higher; and
 
    
    foreign exchange and derivative contracts at their replacement cost value.
    Regulation Relating to Country Risk Management
  114




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Regulation Relating to Capital Markets Exposure
  
    
    direct investment by a bank in equity shares, convertible bonds
and debentures and units of equity-oriented mutual funds;
 
    
    advances against shares to individuals for investments in
equity shares (including initial public offerings), bonds and debentures,
units of equity-oriented mutual funds and similar securities; and
 
    
    secured and unsecured advances to stockbrokers and guarantees
issued on behalf of stockbrokers and market makers.
    Regulations Relating to Investments
 Exposure
Limits
    115




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##### Table of Contents



Non-Performing
Investments
  Restrictions
on Investments in a Single Company
  Prohibition
on Short Selling
  Valuation
of Investments
    116




---



##### Table of Contents



Regulations Relating to Deposits
    
    
    Time deposits are of Rs. 1.5 million and above; and
 
    
    Interest is paid in accordance with a schedule of interest rates
disclosed in advance by the bank and not pursuant to negotiation
between the depositor and the bank.
  Insurance of Deposits
  Regulations Relating to Know Your Customer (KYC) Guidelines  Anti-Money Laundering Standards
  117




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##### Table of Contents



inter alia
  Customer
Acceptance Policy (CAP)
  
    
    No account is opened in an anonymous or a fictitious name;
 
    
    Parameters of risk perception are clearly defined in terms of, among other things, the
nature of business activity, location of the customer and its clients, mode of payments,
volume of turnover and social and financial status to enable categorization of customers
into low, medium and high risk;
 
    
    Documentation requirements and other information to be collected in respect of
different categories of customers; and
 
    
    Application of appropriate customer due-diligence measures.
 Customer
Identification Procedure (CIP)
  Monitoring of Transactions
  Risk
Management
  118




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##### Table of Contents



Legal Reserve Requirements
 Cash
Reserve Ratio
  
    
    interbank liabilities; and
 
    
    refinancing from the RBI and other institutions permitted to offer refinancing to banks.
   Statutory
Liquidity Ratio
  
    
    any advance taken from the RBI or from certain other financial institutions; and
 
    
    interbank liabilities to the extent of interbank assets.
 Regulations for Asset Liability Management
  Foreign Currency Dealership
  119




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##### Table of Contents



Statutes Governing Foreign Exchange and Cross Border Business Transactions
  Requirements of the Banking Regulation Act
 Reserve
Fund
  Restrictions
on Payment of Dividends
    
    
    Capital adequacy ratio must be at least 9% for the preceding two completed years and the fiscal year for which the
bank proposes to declare a dividend;
 
    
    Net non-performing assets must be less than 7% of advances (5% of advances where the capital adequacy ratio is
less than 9% for the preceding two completed years but at least 9% for the fiscal year for which the bank proposes
to declare a dividend);
 
    
    The bank has complied with the provisions of Sections 15 and 17 of the Banking Regulation Act;
 
    
    The bank has complied with the prevailing regulations/guidelines issued by the RBI, including creating adequate
provisions for impairment of assets and staff retirement benefits, transfer of profits to statutory reserves,
etc.;
 
    
    The dividend should be payable out of the current years profits; and
 
    
    The RBI has not placed any explicit restrictions on the bank for declarations of dividends.
 120




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##### Table of Contents




    
    The dividend payout ratio (calculated as a percentage of
dividend payable in a year (excluding dividend tax) to net
profit during the year) should not exceed 40%. The RBI has
prescribed a matrix of criteria linked to the capital
adequacy ratio and the net non-performing assets ratio in
order to ascertain the maximum permissible range of dividend
payout ratio;
 
    
    If the financial statements for which the dividend is
declared have any audit qualifications which have an adverse
bearing on the profits, the same should be adjusted while
calculating the dividend payout ratio; and
 
    
    For the fiscal 2005, if the IFR is less than 4% of securities
included in the Held for Trading and Available for Sale
categories, the dividend pay out ratio shall be computed with
respect to the net profit adjusted for the shortfall.
 Restriction
on Share Capital and Voting Rights
   Restriction
on Transfer of Shares
  Regulatory
Reporting and Examination Procedures
  
    
    assets, liabilities and off-balance sheet exposures;
 
    
    the risk weighting of these exposures, the capital base and the capital adequacy ratio;
 
    
    the unaudited balance sheet/statement of income;
 
    
    asset quality;
 
    
    concentration of exposures; and
 
    
    other prudential parameters.
  121




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##### Table of Contents



Penalties
  Assets
to be Maintained in India
  Secrecy Obligations
  Guidelines for merger/amalgamation of private sector banks
  Appointment and Remuneration of Our Chairman, Managing Director and Other Directors
     122




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Securities and Exchange Board of India Regulations and Guidelines
  123




---



##### Table of Contents



EXCHANGE CONTROLS
 Restrictions on Conversion of Rupees
  Restrictions on Sale of the Equity Shares Underlying the ADSs and for Repatriation of Sale Proceeds
  inter alia
 124




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##### Table of Contents



RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES
     
    
    Under the foreign direct investment route, foreign investors may own our equity shares only with the approval of the
Foreign Investment Promotion Board; this approval is granted on a case-by-case basis;
 
    
    Under the Issue of Foreign Currency Convertible Bonds and Equity Shares (through Depositary Receipt Mechanism)
Scheme, 1993, foreign investors may purchase ADSs subject to the receipt of all necessary government approvals at the
time the depositary receipt program is set up. With a view to liberalizing the operational procedures, the government
of Indias Ministry of Finance and the RBI have granted a general approval to ADS issues, subject to certain
restrictions; and
 
    
    Under the portfolio investment route, foreign institutional investors, subject to registration with SEBI and the RBI,
and non-resident Indians, subject to a resolution of the board of directors and a special resolution of the
shareholders, may be permitted to own in the aggregate up to 49% of the total issued capital of a company that is not
represented by ADSs; no single foreign institutional investor may own more than 10% of the total issued capital of a
company; a corporate/individual sub-account of the foreign institutional investor may not hold more than 5% of the
total issued capital of a company; a broad based sub-account may not hold more than 10% of the total issued capital of
a company and no single non-resident Indian may own more than 5% of the total issued capital of a company.
  125




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ADDITIONAL INFORMATION
   126




---



##### Table of Contents



INDEX TO FINANCIAL STATEMENTS
 PageFinancial Statements of HDFC Bank Limited:Report of independent registered public accounting firm
    
    
    F-2Balance sheets as of March 31, 2004 and 2005
    
    
    F-3Statements of income for the years ended March 31, 2003, 2004 and 2005
    
    
    F-4Statements of cash flows for the years ended March 31, 2003, 2004 and 2005
    
    
    F-5Statements of shareholders equity for the years ended March 31, 2003, 2004 and 2005
    
    
    F-6Notes to financial statements
    
    
    F-7
 F-1




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
          F-2




---



##### Table of Contents



HDFC BANK LIMITED
BALANCE SHEETS
As of March 31, 2004 and 2005
 As of March 31,2004
    
    2005
    
    2005(In millions, except number of shares)ASSETS:Cash and cash equivalents
    
    Rs.
    33,010.4
    
    
    Rs.
    37,575.8
    
    
    US$
    861.5Term placements
    
    
    3,565.2
    
    
    
    8,699.6
    
    
    
    199.4Investments held for trading, at market
    
    
    6,233.8
    
    
    
    1,278.5
    
    
    
    29.3Investments available for sale, at market
    
    
    133,274.6
    
    
    
    204,292.8
    
    
    
    4,683.5Investments held to maturity, at amortized cost
    
    
    36,368.4
    
    
    
    
    
    
    
    Securities purchased under agreements to resell
    
    
    19,950.0
    
    
    
    
    
    
    
    Loans (net of allowance of Rs. 3,494.3 and Rs. 5,438.5, respectively)
    
    
    177,681.1
    
    
    
    256,486.9
    
    
    
    5,880.0Accrued interest receivable
    
    
    4,178.7
    
    
    
    4,912.1
    
    
    
    112.6Property and equipment, net
    
    
    6,169.1
    
    
    
    7,083.2
    
    
    
    162.4Other assets
    
    
    6,404.3
    
    
    
    9,125.3
    
    
    
    209.2Total assets
    
    Rs.
    426,835.6
    
    
    Rs.
    529,454.2
    
    
    US$
    12,137.9LIABILITIES AND SHAREHOLDERS EQUITY:LiabilitiesInterest-bearing deposits
    
    Rs.
    215,710.8
    
    
    Rs.
    257,237.9
    
    
    US$
    5,897.2Non-interest bearing deposits
    
    
    88,351.2
    
    
    
    106,304.6
    
    
    
    2,437.1Total deposits
    
    
    304,062.0
    
    
    
    363,542.5
    
    
    
    8,334.3Short-term borrowings
    
    
    24,064.2
    
    
    
    62,079.1
    
    
    
    1,423.2Accrued interest payable
    
    
    4,165.4
    
    
    
    5,843.0
    
    
    
    134.0Long-term debt
    
    
    6,086.0
    
    
    
    5,028.1
    
    
    
    115.3Accrued expenses and other liabilities
    
    
    57,242.2
    
    
    
    43,623.5
    
    
    
    1,000.0Total liabilities
    
    
    395,619.8
    
    
    
    480,116.2
    
    
    
    11,006.8Contingencies (See Note 26)
    
    
    
    
    
    
    
    
    
    
    Shareholders equity:Equity
shares: par valueRs.10 each;
authorized 450,000,000 shares; issued and outstanding282,844,438 shares and 309,875,308 shares,
respectively
    
    
    2,828.4
    
    
    
    3,098.7
    
    
    
    71.0Additional paid in capital
    
    
    12,527.3
    
    
    
    25,789.2
    
    
    
    591.2Advance received pending allotment of shares
    
    
    125.5
    
    
    
    423.3
    
    
    
    9.7Retained earnings
    
    
    9,057.1
    
    
    
    12,871.6
    
    
    
    295.1Statutory reserve
    
    
    4,523.7
    
    
    
    6,187.6
    
    
    
    141.9Deferred stock based compensation
    
    
    (374.6
    )
    
    
    (66.1
    )
    
    
    (1.5
    )Accumulated other comprehensive income
    
    
    2,528.4
    
    
    
    1,033.7
    
    
    
    23.7Total shareholders equity
    
    
    31,215.8
    
    
    
    49,338.0
    
    
    
    1,131.1Total liabilities and shareholders equity
    
    Rs.
    426,835.6
    
    
    Rs.
    529,454.2
    
    
    US$
    12,137.9
  F-3




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##### Table of Contents



HDFC BANK LIMITED
STATEMENTS OF INCOME
For each of the years ended March 31, 2003, 2004 and 2005
 Years ended March 31,2003
    
    2004
    
    2005
    
    2005(In millions, except share and per share amounts)Interest and dividend revenue:Loans
    
    Rs.
    7,805.3
    
    
    Rs.
    11,705.0
    
    
    Rs.
    16,431.4
    
    
    US$
    376.7Trading securities
    
    
    478.9
    
    
    
    289.6
    
    
    
    144.4
    
    
    
    3.3Securities, including dividend
    
    
    9,907.2
    
    
    
    11,487.3
    
    
    
    11,399.1
    
    
    
    261.3Other
    
    
    1,233.4
    
    
    
    1,109.6
    
    
    
    1,234.5
    
    
    
    28.3Total interest revenue
    
    
    19,424.8
    
    
    
    24,591.5
    
    
    
    29,209.4
    
    
    
    669.6Interest expense:Deposits
    
    
    10,508.5
    
    
    
    10,279.2
    
    
    
    11,074.1
    
    
    
    253.9Short-term borrowings
    
    
    1,032.9
    
    
    
    1,435.9
    
    
    
    1,759.4
    
    
    
    40.3Long-term debt
    
    
    237.8
    
    
    
    268.0
    
    
    
    390.2
    
    
    
    9.0Total interest expense
    
    
    11,779.2
    
    
    
    11,983.1
    
    
    
    13,223.7
    
    
    
    303.2Net interest revenue
    
    
    7,645.6
    
    
    
    12,608.4
    
    
    
    15,985.7
    
    
    
    366.4Allowance for credit losses, net
    
    
    741.5
    
    
    
    2,343.4
    
    
    
    3,048.2
    
    
    
    69.9Net interest revenue after allowance for credit losses
    
    
    6,904.1
    
    
    
    10,265.0
    
    
    
    12,937.5
    
    
    
    296.5Non-interest revenue, net:Fees and commissions
    
    
    2,306.4
    
    
    
    3,140.7
    
    
    
    6,124.4
    
    
    
    140.4Trading securities gains/ (losses), net
    
    
    507.8
    
    
    
    396.8
    
    
    
    (39.3
    )
    
    
    (0.9
    )Realized gain/ (losses) on sales of available for sale securities, net
    
    
    721.7
    
    
    
    (48.3
    )
    
    
    194.3
    
    
    
    4.5Foreign exchange transaction gains
    
    
    445.3
    
    
    
    740.0
    
    
    
    911.7
    
    
    
    20.9Derivative transaction gains
    
    
    379.1
    
    
    
    443.9
    
    
    
    204.0
    
    
    
    4.7Other, net
    
    
    37.0
    
    
    
    24.5
    
    
    
    816.4
    
    
    
    18.7Total non-interest revenue, net
    
    
    4,397.3
    
    
    
    4,697.6
    
    
    
    8,211.5
    
    
    
    188.3Total revenue, net
    
    
    11,301.4
    
    
    
    14,962.6
    
    
    
    21,149.0
    
    
    
    484.8Non-interest expense:Salaries and staff benefits
    
    
    1,661.2
    
    
    
    2,154.0
    
    
    
    3,249.9
    
    
    
    74.5Premises and equipment
    
    
    1,343.6
    
    
    
    1,828.5
    
    
    
    2,260.8
    
    
    
    51.8Depreciation and amortization
    
    
    1,052.4
    
    
    
    1,254.9
    
    
    
    1,440.7
    
    
    
    33.0Administrative and other
    
    
    2,000.7
    
    
    
    3,131.9
    
    
    
    4,462.5
    
    
    
    102.3Total non-interest expense
    
    
    6,057.9
    
    
    
    8,369.3
    
    
    
    11,413.9
    
    
    
    261.6Income before income tax
    
    
    5,243.5
    
    
    
    6,593.3
    
    
    
    9,735.1
    
    
    
    223.2Income tax
    
    
    1,729.7
    
    
    
    1,838.8
    
    
    
    3,125.4
    
    
    
    71.7Net income
    
    Rs.
    3,513.8
    
    
    Rs.
    4,754.5
    
    
    Rs.
    6,609.7
    
    
    US$
    151.5Per share information: (See Note: 29)Earnings per equity sharebasic
    
    Rs.
    12.57
    
    
    Rs.
    16.87
    
    
    Rs.
    22.78
    
    
    US$
    0.52Earnings per equity sharediluted
    
    Rs.
    12.51
    
    
    Rs.
    16.70
    
    
    Rs.
    22.60
    
    
    US$
    0.52Per ADS information (where 1 ADS represents 3 shares):Earnings per ADSbasic
    
    Rs.
    37.71
    
    
    Rs.
    50.61
    
    
    Rs.
    68.34
    
    
    US$
    1.57Earnings per ADSdiluted
    
    Rs.
    37.53
    
    
    Rs.
    50.10
    
    
    Rs.
    67.80
    
    
    US$
    1.55
  F-4




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##### Table of Contents



HDFC BANK LIMITED
STATEMENTS OF CASH FLOWS
For each of the years ended March 31, 2003, 2004 and 2005
 Years ended March 31,2003
    
    2004
    
    2005
    
    2005(In millions)Cash flows from operating activities:Net income
    
    Rs.
    3,513.8
    
    
    Rs.
    4,754.5
    
    
    Rs.
    6,609.7
    
    
    US$
    151.5Adjustment to reconcile net income to net cash provided by/ (used in) operating activitiesAllowance for credit losses
    
    

    741.5
    
    
    
    2,343.4
    
    
    
    3,048.2
    
    
    
    69.9Depreciation and amortization
    
    
    1,052.4
    
    
    
    1,254.9
    
    
    
    1,440.7
    
    
    
    33.0Amortization of deferred stock based compensation
    
    
    138.0
    
    
    
    135.1
    
    
    
    308.5
    
    
    
    7.1Amortization of deferred acquisition costs
    
    
    (474.4
    )
    
    
    (156.2
    )
    
    
    (496.3
    )
    
    
    (11.4
    )Amortization of premium/(discount) on investments
    
    
    761.6
    
    
    
    1,489.6
    
    
    
    1,516.1
    
    
    
    34.8Provision for deferred income taxes
    
    
    (102.8
    )
    
    
    (588.4
    )
    
    
    (213.5
    )
    
    
    (4.9
    )Provision made for guarantees
    
    
    
    
    
    
    112.7
    
    
    
    50.1
    
    
    
    1.2(Gain) on securitization of loans
    
    
    
    
    
    
    (123.8
    )
    
    
    (622.5
    )
    
    
    (14.3
    )Net realized (gain) / loss on sale of available for sale securities
    
    
    (721.7
    )
    
    
    48.3
    
    
    
    (194.3
    )
    
    
    (4.5
    )(Gain)/loss on disposal of property and equipment, net
    
    
    (10.8
    )
    
    
    4.4
    
    
    
    (2.1
    )
    
    
    (0.1
    )Provision made for leave accrued
    
    
    
    
    
    
    
    
    
    
    186.3
    
    
    
    4.3Net change in:Investments held for trading
    
    
    (138.5
    )
    
    
    (2,257.7
    )
    
    
    4,955.3
    
    
    
    113.6Accrued interest receivable
    
    
    (2,199.9
    )
    
    
    2,105.1
    
    
    
    (733.4
    )
    
    
    (16.8
    )Other assets
    
    
    (2,406.2
    )
    
    
    2,675.3
    
    
    
    (2,057.0
    )
    
    
    (47.2
    )Accrued interest payable
    
    
    2,718.6
    
    
    
    (2,731.9
    )
    
    
    1,677.6
    
    
    
    38.5Accrued expense and other liabilities
    
    
    11,615.9
    
    
    
    31,190.6
    
    
    
    (13,728.7
    )
    
    
    (314.7
    )Net cash provided by operating activities
    
    
    14,487.5
    
    
    
    40,255.9
    
    
    
    1,744.7
    
    
    
    40.0Cash flows from investing activities:Net change in term placements
    
    
    (7,747.4
    )
    
    
    4,182.2
    
    
    
    (5,134.3
    )
    
    
    (117.7
    )Activity in available for sale securities:Purchases
    
    
    (382,916.3
    )
    
    
    (265,970.2
    )
    
    
    (153,898.8
    )
    
    
    (3,528.2
    )Proceeds from sales
    
    
    341,254.1
    
    
    
    209,229.1
    
    
    
    96,986.1
    
    
    
    2,223.4Maturities, prepayments and calls
    
    
    24,209.6
    
    
    
    22,626.0
    
    
    
    20,543.1
    
    
    
    471.0Activity in held to maturity securities:Purchases
    
    
    (56,274.0
    )
    
    
    (78,592.0
    )
    
    
    (11,888.8
    )
    
    
    (272.6
    )Maturities, prepayments and calls
    
    
    52,896.0
    
    
    
    79,721.9
    
    
    
    10,792.0
    
    
    
    247.4Net change in repos and reverse repos
    
    
    6,779.6
    
    
    
    (24,550.0
    )
    
    
    19,950.0
    
    
    
    457.4Proceeds from loans securitized
    
    
    
    
    
    
    5,917.4
    
    
    
    48,234.6
    
    
    
    1,105.8Increase in loans originated, net of principal collections
    
    
    (47,512.5
    )
    
    
    (67,765.8
    )
    
    
    (129,466.1
    )
    
    
    (2,968.0
    )Additions to property and equipment
    
    
    (2,533.5
    )
    
    
    (2,143.9
    )
    
    
    (2,442.8
    )
    
    
    (56.0
    )Proceeds from sale or disposal of property and equipment
    
    
    16.2
    
    
    
    24.9
    
    
    
    9.5
    
    
    
    0.2Net cash used in investing activities
    
    
    (71,828.2
    )
    
    
    (117,320.4
    )
    
    
    (106,315.5
    )
    
    
    (2,437.3
    )Cash flows from financing activities:Net increase in deposits
    
    
    47,221.9
    
    
    
    80,302.0
    
    
    
    59,480.5
    
    
    
    1,363.6Net increase/(decrease) in short-term borrowings
    
    
    (20.7
    )
    
    
    2,484.6
    
    
    
    38,014.9
    
    
    
    871.5Proceeds from issuance of long-term debt
    
    
    
    
    
    
    4,000.0
    
    
    
    
    
    
    
    Repayments of long-term debt
    
    
    (41.9
    )
    
    
    (30.0
    )
    
    
    (1,057.9
    )
    
    
    (24.2
    )Proceeds from issuance of equity shares for options exercised
    
    
    86.7
    
    
    
    203.6
    
    
    
    659.1
    
    
    
    15.1Proceeds from issuance of ADSs
    
    
    
    
    
    
    
    
    
    
    12,747.6
    
    
    
    292.2Proceeds from applications received for shares pending allotment
    
    
    146.5
    
    
    
    125.5
    
    
    
    423.3
    
    
    
    9.7Payment of dividends and dividend tax
    
    
    (697.5
    )
    
    
    (955.7
    )
    
    
    (1,131.3
    )
    
    
    (25.9
    )Net cash provided by financing activities
    
    
    46,695.0
    
    
    
    86,130.0
    
    
    
    109,136.2
    
    
    
    2,502.0Net change in cash
    
    
    (10,645.7
    )
    
    
    9,065.5
    
    
    
    4,565.4
    
    
    
    104.7Cash and cash equivalents, beginning of year
    
    
    34,590.6
    
    
    
    23,944.9
    
    
    
    33,010.4
    
    
    
    756.8Cash and cash equivalents, end of year
    
    Rs.
    23,944.9
    
    
    Rs.
    33,010.4
    
    
    Rs.
    37,575.8
    
    
    US$
    861.5Supplementary cash flow information:Interest paid
    
    Rs.
    9,183.4
    
    
    Rs.
    14,819.5
    
    
    Rs.
    11,543.9
    
    
    US$
    264.7Income taxes paid
    
    Rs.
    2,374.7
    
    
    Rs.
    2,843.9
    
    
    Rs.
    3,719.5
    
    
    US$
    85.3Supplementary information on non cash transactions:Investments transferred from held to maturity to available for sale category
    
    Rs.
    450.0
    
    
    Rs.
    4.9
    
    
    Rs.
    37,005.6
    
    
    US$
    848.4Investments transferred from trading to available for sale category
    
    Rs.
    1,162.3
    
    
    Rs.
    
    
    
    Rs.
    
    
    
    US$
    
  F-5




---



##### Table of Contents



HDFC BANK LIMITED
STATEMENTS OF SHAREHOLDERS EQUITY
For each of the years ended March 31, 2003, 2004 and 2005
 AccumulatedNumber of
    

    Equity

    
    Additional
    
    Advance
    
    
    
    
    
    
    
    
    

    Deferred
    
    other
    
    TotalEquity
    
    share
    
    paid in
    
    received pending
    
    Retained
    
    Statutory
    
    stock based
    
    comprehensive
    
    Shareholders'shares
    
    capital
    
    capital
    
    allotment of shares
    
    Earnings
    
    reserve
    
    compensation
    
    income (loss)
    
    equity(In millions, except for equity shares)Balance at March 31, 2002
    
    
    279,032,838
    
    
    Rs.
    2,790.3
    
    
    Rs.
    11,679.1
    
    
    Rs.
    
    
    
    Rs.
    4,684.8
    
    
    Rs.
    2,280.9
    
    
    Rs.
    (198.2)
    
    
    Rs.
    824.0
    
    
    Rs.
    22,060.9Shares issued upon exercise
of options
    
    
    686,100
    
    
    
    6.9
    
    
    
    79.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    86.7Dividends, including dividend
tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (697.5
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (697.5
    )Advances received pending
allotment of shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    146.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    146.5Amortization of deferred stock
based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    138.0
    
    
    
    
    
    
    
    138.0Transfer to statutory reserve
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (969.0
    )
    
    
    969.0
    
    
    
    
    
    
    
    
    
    
    
    Sub Total
    
    
    279,718,938
    
    
    
    2,797.2
    
    
    
    11,758.9
    
    
    
    146.5
    
    
    
    3,018.3
    
    
    
    3,249.9
    
    
    
    (60.2
    )
    
    
    824.0
    
    
    
    21,734.6Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,513.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,513.8Change in unrealized gain
on available for
Sale securities,
net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    864.7
    
    
    
    864.7Balance at March 31, 2003
    
    
    279,718,938
    
    
    Rs.
    2,797.2
    
    
    Rs.
    11,758.9
    
    
    Rs.
    146.5
    
    
    Rs.
    6,532.1
    
    
    Rs.
    3,249.9
    
    
    Rs.
    (60.2)
    
    
    Rs.
    1,688.7
    
    
    Rs.
    26,113.1Shares issued upon exercise
of options
    
    
    3,125,500
    
    
    
    31.2
    
    
    
    318.9
    
    
    
    (146.5
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    203.6Stock options granted
    
    
    
    
    
    
    
    
    
    
    449.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (449.5
    )
    
    
    
    
    
    
    Dividends, including dividend
tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (955.7
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (955.7
    )Advances received pending
allotment of shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    125.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    125.5Amortization of deferred stock
based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    135.1
    
    
    
    
    
    
    
    135.1Transfer to statutory reserve
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,273.8
    )
    
    
    1,273.8
    
    
    
    
    
    
    
    
    
    
    
    Sub Total
    
    
    282,844,438
    
    
    
    2,828.4
    
    
    
    12,527.3
    
    
    
    125.5
    
    
    
    4,302.6
    
    
    
    4,523.7
    
    
    
    (374.6
    )
    
    
    1,688.7
    
    
    
    25,621.6Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,754.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,754.5Unrealized loss
reclassified to earnings, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (582.2
    )
    
    
    (582.2
    )Change in the unrealized gain
on available for sale
securities, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,421.9
    
    
    
    1,421.9Balance at March 31, 2004
    
    
    282,844,438
    
    
    Rs.
    2,828.4
    
    
    Rs.
    12,527.3
    
    
    Rs.
    125.5
    
    
    Rs.
    9,057.1
    
    
    Rs.
    4,523.7
    
    
    Rs.
    (374.6)
    
    
    Rs.
    2,528.4
    
    
    Rs.
    31,215.8Shares issued upon exercise
of options
    
    
    4,106,775
    
    
    
    41.1
    
    
    
    743.5
    
    
    
    (125.5
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    659.1Shares issued in public
offering of ADSs
    
    
    22,924,095
    
    
    
    229.2
    
    
    
    12,518.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,747.6Dividends, including dividend
tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,131.3
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,131.3
    )Advances received pending
allotment of shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    423.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    423.3Amortization of deferred stock
based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    308.5
    
    
    
    
    
    
    
    308.5Transfer to statutory reserve
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,663.9
    )
    
    
    1,663.9
    
    
    
    
    
    
    
    
    
    
    
    Sub Total
    
    
    309,875,308
    
    
    
    3,098.7
    
    
    
    25,789.2
    
    
    
    423.3
    
    
    
    6,261.9
    
    
    
    6,187.6
    
    
    
    (66.1
    )
    
    
    2,528.4
    
    
    
    44,223.0Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,609.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,609.7Unrealized gains on
securities transferred from
HTM to AFS, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    558.9
    
    
    
    558.9Unrealized loss reclassified
to earnings, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (773.4
    )
    
    
    (773.4
    )Change in the unrealized gain
on available for sale
securities, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,280.2
    )
    
    
    (1,280.2
    )Balance at March 31, 2005
    
    
    309,875,308
    
    
    Rs.
    3,098.7
    
    
    Rs.
    25,789.2
    
    
    Rs.
    423.3
    
    
    Rs.
    12,871.6
    
    
    Rs.
    6,187.6
    
    
    Rs.
    (66.1)
    
    
    Rs.
    1,033.7
    
    
    Rs.
    49,338.0Balance at March 31, 2005
    
    
    
    
    
    US$
    71.0
    
    
    US$
    591.2
    
    
    US$
    9.7
    
    
    US$
    295.1
    
    
    US$
    141.9
    
    
    US$
    (1.5
    )
    
    US$
    23.7
    
    
    US$
    1,131.1
  F-6




---



##### Table of Contents



1. The Bank
    2. Summary of Significant Accounting Policies
 Basis of presentation and consolidation
   Use of Estimates
  Cash and cash equivalents
  Customer acquisition costs
  Investments in securities
  F-7




---



##### Table of Contents



. Impairment of securities
  Loans
  Retail
    F-8




---



##### Table of Contents



Wholesale
    Allowance for credit losses
  Retail
     F-9




---



##### Table of Contents



Wholesale
      . Sales of Receivables
     F-10




---



##### Table of Contents



Property and equipment
  Type of Asset
    
    Rate of depreciationBuildings
    
    
    1.61
    %Leasehold improvements
    
    Over the period of leaseATMs
    
    
    12.50
    %Very small aperture terminals (VSATs)
    
    
    10.00
    %Office equipment
    
    
    16.21
    %Computer equipment
    
    
    33.33
    %Motor cars
    
    
    25.00
    %Software
    
    
    25.00
    %
 Impairment or disposal of tangible long lived assets
  Foreclosed or repossessed assets
  Income tax
   Revenue recognition
   F-11




---



##### Table of Contents



Foreign currency transactions
  Stock Based Compensation
   Years ended March 31,2003
    
    2004
    
    2005
    
    2005(In millions, except per share amounts)Net Income:
    
    As reported
    
    Rs.
    3,513.8
    
    
    Rs.
    4,754.5
    
    
    Rs.
    6,609.7
    
    
    US$
    151.5Add: Stock-based employee compensation expense included in
net income
    
    As reported
    
    
    138.0
    
    
    
    135.1
    
    
    
    308.5
    
    
    
    7.1Less: Stock based compensation expense determined under
fair value based method
    
    Pro forma
    
    
    (329.4
    )
    
    
    (293.3
    )
    
    
    (1,209.4
    )
    
    
    (27.7
    )Net Income:
    
    Pro forma
    
    Rs.
    3,322.4
    
    
    Rs.
    4,596.3
    
    
    Rs.
    5,708.8
    
    
    US$
    130.9Basic earnings per share
    
    As reported
    
    Rs.
    12.57
    
    
    Rs.
    16.87
    
    
    Rs.
    22.78
    
    
    US$
    0.52Pro forma
    
    
    11.88
    
    
    
    16.31
    
    
    
    19.68
    
    
    
    0.45Diluted earnings per share
    
    As reported
    
    Rs.
    12.51
    
    
    Rs.
    16.70
    
    
    Rs.
    22.60
    
    
    US$
    0.52Pro forma
    
    
    11.82
    
    
    
    16.14
    
    
    
    19.52
    
    
    
    0.45Basic earnings per ADS
    
    As reported
    
    Rs.
    37.71
    
    
    Rs.
    50.61
    
    
    Rs.
    68.34
    
    
    US$
    1.57Pro forma
    
    
    35.64
    
    
    
    48.93
    
    
    
    59.04
    
    
    
    1.35Diluted earnings per ADS
    
    As reported
    
    Rs.
    37.53
    
    
    Rs.
    50.10
    
    
    Rs.
    67.80
    
    
    US$
    1.55Pro forma
    
    
    35.46
    
    
    
    48.42
    
    
    
    58.56
    
    
    
    1.33
 F-12




---



##### Table of Contents



pro forma
 Years ended March 31,2003
    
    2004
    
    2005Dividend yield
    
    
    
    
    
    
    0.9%
    
    
    
    Expected volatility
    
    
    
    
    
    
    45.0%
    
    
    
    Riskfree interest rateESOS Plan
    
    
    
    
    
    
    4.4%  4.5%
    
    
    
    EWT Plan
    
    
    
    
    
    
    4.5%
    
    
    
    Expected lives:
    
    
    
    
    
    
    
    
    
    
    ESOS Plan
    
    
    
    
    
    7.1 years
    
    
    EWT Plan
    
    
    
    
    
    1.2  2.2 years
    
    
    
 Debt issuance costs
  Earnings per share
  Segment information
  Derivative Financial Instruments
   F-13




---



##### Table of Contents



New Accounting Pronouncements
          ,
 ,
 Convenience Translation
  3. Cash and cash equivalents
  4. Term placements
  F-14




---



##### Table of Contents



5. Investments, held for trading
  As of March 31, 2004Gross
    
    GrossAmortized
    
    unrealized
    
    unrealized
    
    FairCost
    
    gains
    
    losses
    
    Value(In millions)Government of India securities
    
    Rs.
    4,244.2
    
    
    Rs.
    25.0
    
    
    Rs.
    
    
    
    Rs.
    4,269.2Securities issued by Government of India
sponsored institutions
    
    
    1,483.6
    
    
    
    
    
    
    
    13.7
    
    
    
    1,469.9Corporate bonds and debentures
    
    
    503.0
    
    
    
    1.1
    
    
    
    9.4
    
    
    
    494.7Total
    
    Rs.
    6,230.8
    
    
    Rs.
    26.1
    
    
    Rs.
    23.1
    
    
    Rs.
    6,233.8
 As of March 31, 2005Gross
    
    GrossAmortized
    
    unrealized
    
    Unrealized
    
    FairCost
    
    gains
    
    Losses
    
    Value(In millions)Government of India
securities
    
    Rs.
    1,278.5
    
    
    Rs.
    
    
    
    Rs.
    
    
    
    Rs.
    1,278.5Total
    
    Rs.
    1,278.5
    
    
    Rs.
    
    
    
    Rs.
    
    
    
    Rs.
    1,278.5
 6. Investments, available for sale
  As of March 31, 2004Gross
    
    GrossAmortized
    
    unrealized
    
    unrealized
    
    Faircost
    
    gains
    
    losses
    
    value(In millions)Government of India securities
    
    Rs.
    63,252.8
    
    
    Rs.
    1,407.9
    
    
    Rs.
    37.3
    
    
    Rs.
    64,623.4Securities issued by Government of India sponsored institutions
    
    
    22,495.8
    
    
    
    1,970.1
    
    
    
    97.9
    
    
    
    24,368.0State government securities
    
    
    282.2
    
    
    
    19.0
    
    
    
    0.1
    
    
    
    301.1Securities issued by state government sponsored institutions
    
    
    47.7
    
    
    
    0.5
    
    
    
    
    
    
    
    48.2Credit substitutes (See Note 8)
    
    
    7,812.3
    
    
    
    136.0
    
    
    
    2.3
    
    
    
    7,946.0Corporate bonds
    
    
    198.9
    
    
    
    0.1
    
    
    
    0.9
    
    
    
    198.1Fixed maturity investments
    
    
    94,089.7
    
    
    
    3,533.6
    
    
    
    138.5
    
    
    
    97,484.8Mortgage backed securities
    
    
    8,878.7
    
    
    
    275.3
    
    
    
    
    
    
    
    9,154.0Asset backed securities
    
    
    19,978.4
    
    
    
    593.2
    
    
    
    13.1
    
    
    
    20,558.5Equity securities
    
    
    180.9
    
    
    
    26.5
    
    
    
    2.0
    
    
    
    205.4Mutual fund units
    
    
    6,045.4
    
    
    
    12.4
    
    
    
    185.9
    
    
    
    5,871.9Total
    
    Rs.
    129,173.1
    
    
    Rs.
    4,441.0
    
    
    Rs.
    339.5
    
    
    Rs.
    133,274.6Securities with gross unrealized losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    Rs.
    13,788.3Securities with gross unrealized gains
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    119,486.3Rs.
    133,274.6
 F-15




---



##### Table of Contents



As of March 31, 2005Gross
    
    GrossAmortized
    
    unrealized
    
    unrealized
    
    Faircost
    
    gains
    
    losses
    
    value(In millions)Government of India securities
    
    Rs.
    110,997.7
    
    
    Rs.
    1,015.2
    
    
    Rs.
    657.6
    
    
    Rs.
    111,355.3Securities issued by Government of India sponsored institutions
    
    
    25,010.5
    
    
    
    592.7
    
    
    
    134.9
    
    
    
    25,468.3State government securities
    
    
    484.6
    
    
    
    2.2
    
    
    
    14.6
    
    
    
    472.2Securities issued by state government sponsored institutions
    
    
    349.2
    
    
    
    24.1
    
    
    
    
    
    
    
    373.3Credit substitutes (See Note 8)
    
    
    13,372.4
    
    
    
    554.3
    
    
    
    45.8
    
    
    
    13,880.9Corporate bonds
    
    
    588.5
    
    
    
    
    
    
    
    0.4
    
    
    
    588.1Fixed maturity investments
    
    
    150,802.9
    
    
    
    2,188.5
    
    
    
    853.3
    
    
    
    152,138.1Mortgage-backed securities
    
    
    10,703.5
    
    
    
    89.7
    
    
    
    125.2
    
    
    
    10,668.0Asset-backed securities
    
    
    31,349.0
    
    
    
    20,019.1
    
    
    
    19,978.6
    
    
    
    31,389.5Equity securities
    
    
    291.4
    
    
    
    54.7
    
    
    
    7.8
    
    
    
    338.3Mutual fund units
    
    
    9,586.3
    
    
    
    10.6
    
    
    
    1.8
    
    
    
    9,595.1Total
    
    Rs.
    202,733.1
    
    
    Rs.
    2,694.8
    
    
    Rs.
    1,135.1
    
    
    Rs.
    204,292.8Securities with gross unrealized losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    Rs.
    103,551.3Securities with gross unrealized gains
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100,741.5Rs.
    204,292.8
  
    
    identification and evaluation of investments that have indications of possible impairment;
    
    analysis of individual investments that have fair values of less than 75% of amortized
cost, including consideration of the length of time the investment has been in an
unrealized loss position;
    
    analysis of evidential matter, including an evaluation of factors or triggers that would
or could cause individual investments to have other-than temporary impairment; and
    
    documentation of the results of these analyses, as required under business policies.
 F-16




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##### Table of Contents



As of March 31, 2005Amortized cost
    
    Fair value
    
    Fair value(In millions)Within one year
    
    Rs.
    32,319.6
    
    
    Rs.
    32,435.8
    
    
    US$
    743.6Over one year through
five years
    
    
    66,164.1
    
    
    
    66,369.3
    
    
    
    1,521.6After five years through
ten years
    
    
    34,569.4
    
    
    
    35,144.0
    
    
    
    805.7Over ten years
    
    
    17,749.8
    
    
    
    18,189.0
    
    
    
    417.0Total
    
    Rs.
    150,802.9
    
    
    Rs.
    152,138.1
    
    
    US$
    3,487.9
   Year ended March 31,2003
    
    2004
    
    2005
    
    2005(In millions)Gross realized gains on sale
    
    Rs.
    991.4
    
    
    Rs.
    710.3
    
    
    Rs.
    1,349.9
    
    
    US$
    30.9Gross realized losses on sale
    
    
    (269.7
    )
    
    
    (758.6
    )
    
    
    (1,155.6
    )
    
    
    26.4Realized gains / (losses), net
    
    
    721.7
    
    
    
    (48.3
    )
    
    
    194.3
    
    
    
    4.5Dividends and interest
    
    
    6,144.0
    
    
    
    8,604.8
    
    
    
    10,605.7
    
    
    
    243.1Total
    
    Rs.
    6,865.7
    
    
    Rs.
    8,556.5
    
    
    Rs.
    10,800.0
    
    
    US$
    247.6
 F-17




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##### Table of Contents



7. Investments, held to maturity
  As of March 31, 2004Gross
    
    Grossunrecognized
    
    unrecognizedAmortized
    
    holding
    
    Holding
    
    FairCost
    
    gains
    
    Losses
    
    value(In millions)Government of India
securities
    
    Rs.
    27,245.2
    
    
    Rs.
    1,180.1
    
    
    Rs.
    1.1
    
    
    Rs.
    28,424.2Securities issued
by Government of
India sponsored
institutions
    
    
    511.3
    
    
    
    26.6
    
    
    
    
    
    
    
    537.9Credit substitutes
(See Note 8)
    
    
    8,611.9
    
    
    
    484.5
    
    
    
    0.9
    
    
    
    9,095.5Total
    
    Rs.
    36,368.4
    
    
    Rs.
    1,691.2
    
    
    Rs.
    2.0
    
    
    Rs.
    38,057.6
   Year ended March 31,2003
    
    2004
    
    2005
    
    2005(In millions)Interest
    
    Rs.
    3,763.2
    
    
    Rs.
    2,882.5
    
    

    Rs.
    793.4
    

    
    US$
    18.2Total
    
    Rs.
    3,763.2
    
    

    Rs.
    2,882.5
    

    
    Rs.
    793.4
    

    
    US$
    18.2
     F-18




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##### Table of Contents



8. Credit Substitutes
  As of March 31,2004
    
    2005Amortized cost
    
    Fair value
    
    Amortized cost
    
    Fair value
    
    Fair value(In millions)AFS credit substitute securities:Debentures
    
    Rs.
    6,905.6
    
    
    Rs.
    7,039.3
    
    
    Rs.
    11,508.7
    
    
    Rs.
    12,018.7
    
    
    US$
    275.5Preferred shares
    
    
    
    
    
    
    
    
    
    
    566.4
    
    
    
    564.9
    
    
    
    13.0Commercial paper
    
    
    906.7
    
    
    
    906.7
    
    
    
    1,297.3
    
    
    
    1,297.3
    
    
    
    29.7Total
    
    Rs.
    7,812.3
    
    
    Rs.
    7,946.0
    
    
    Rs.
    13,372.4
    
    
    Rs.
    13,880.9
    
    
    US$
    318.2HTM credit substitute
Securities:Debentures
    
    Rs.
    7,812.7
    
    
    Rs.
    8,247.1
    
    
    
    
    
    
    
    
    
    
    
    Preferred shares
    
    
    799.2
    
    
    
    848.4
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    Rs.
    8,611.9
    
    
    Rs.
    9,095.5
    
    
    
    
    
    
    
    
    
    
    
    Total credit substitutes, net
    
    Rs.
    16,424.2
    
    
    Rs.
    17,041.5
    
    
    Rs.
    13,372.4
    
    
    Rs.
    13,880.9
    
    
    US$
    318.2
  As of March 31,2004
    
    2005(In millions)Performing
    
    Rs.
    16,946.9
    
    
    Rs.
    13,845.2Impairedgross balance
    
    
    189.3
    
    
    
    89.3Less amounts written off for other than
temporary impairments
    
    
    (94.7
    )
    
    
    (53.6
    )Impaired credit substitutes, net
    
    
    94.6
    
    
    
    35.7Total credit substitutes, net
    
    Rs.
    17,041.5
    
    
    Rs.
    13,880.9
 F-19




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##### Table of Contents



As of March 312004
    
    2005
    
    2005(In millions)Gross impaired credit substitutes:on accrual status
    
    Rs.
    100.0
    
    
    Rs.
    
    
    
    US$
    on non-accrual status
    
    
    89.3
    
    
    
    89.3
    
    
    
    2.0Total
    
    Rs.
    189.3
    
    
    Rs.
    89.3
    
    
    US$
    2.0Gross impaired credit substitutes by industry:Textiles
    
    Rs.
    100.0
    
    
    Rs.
    
    
    
    US$
    . Financial institution
    
    
    89.3
    
    
    
    89.3
    
    
    
    2.0Total
    
    Rs.
    189.3
    
    
    Rs.
    89.3
    
    
    US$
    2.0Average impaired credit substitutes
    
    Rs.
    147.1
    
    
    Rs.
    139.3
    
    
    US$
    3.2Interest foregone on impaired credit substitutes
    
    Rs.
    10.3
    
    
    Rs.
    
    
    
    US$
    . Interest income recognized on impaired credit substitutes
    
    Rs.
    12.0
    
    
    Rs.
    
    
    
    US$
    . Interest income recognized on impaired credit substitutes on a cash basis
    
    Rs.
    12.0
    
    
    Rs.
    
    
    
    US$
    . 
  9. Securities purchased under resell agreements
  F-20




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##### Table of Contents



10. Loans
  As of March 31,2004
    
    2005
    
    2005(In millions)Retail loans:Auto loans
    
    Rs.
    28,362.6
    
    
    Rs.
    21,055.1
    
    
    US$
    482.7Commercial vehicle and construction equipment
finance
    
    
    12,152.7
    
    
    
    21,924.2
    
    
    
    502.6Personal loans
    
    
    10,526.1
    
    
    
    20,518.3
    
    
    
    470.4Loans against securities
    
    
    9,379.8
    
    
    
    12,347.2
    
    
    
    283.1Two wheeler loans
    
    
    4,345.0
    
    
    
    10,418.0
    
    
    
    238.8Retail business banking
    
    
    2,659.3
    
    
    
    11,050.7
    
    
    
    253.3Credit cards
    
    
    2,489.9
    
    
    
    6,892.9
    
    
    
    158.0Other retail loans
    
    
    3,336.2
    
    
    
    8,459.6
    
    
    
    194.0Subtotal
    
    
    73,251.6
    
    
    
    112,666.0
    
    
    
    2,582.9Wholesale loans:Working capital finance
    
    Rs.
    54,104.5
    
    
    Rs.
    72,397.6
    
    
    US$
    1,659.7Term loans
    
    
    53,819.3
    
    
    
    76,861.8
    
    
    
    1,762.1Subtotal
    
    Rs.
    107,923.8
    
    
    Rs.
    149,259.4
    
    
    US$
    3,421.8Gross loans
    
    
    181,175.4
    
    
    
    261,925.4
    
    
    
    6,004.7Less: Allowance for credit losses
    
    
    3,494.3
    
    
    
    5,438.5
    
    
    
    124.7Total
    
    Rs.
    177,681.1
    
    
    Rs.
    256,486.9
    
    
    US$
    5,880.0
  As of March 31, 2005WorkingCapital
    
    Term
    
    RetailFinance
    
    loans
    
    loans
    
    Total(In millions)Maturity profile of loans:Within one year
    
    Rs.
    58,318.4
    
    
    Rs.
    55,683.1
    
    
    Rs.
    61,469.3
    
    
    Rs.
    175,470.8Over one year through
five years
    
    
    14,079.2
    
    
    
    16,953.4
    
    
    
    49,352.0
    
    
    
    80,384.6After five years through
ten years
    
    
    
    
    
    
    4,225.3
    
    
    
    1,844.7
    
    
    
    6,070.0Total gross loans
    
    Rs.
    72,397.6
    
    
    Rs.
    76,861.8
    
    
    Rs.
    112,666.0
    
    
    Rs.
    261,925.4
 F-21




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##### Table of Contents



As of March 31,2004
    
    2005
    
    2005(In millions)Performing
    
    Rs.
    178,182.8
    
    
    Rs.
    257,841.2
    
    
    US$
    5,911.1Impaired
    
    
    2,992.6
    
    
    
    4,084.2
    
    
    
    93.6Total
gross
loans
    
    Rs.
    181,175.4
    
    
    Rs.
    261,925.4
    
    
    US$
    6,004.7
  As of March 31,2004
    
    2005
    
    2005(In millions)Retail loans
    
    Rs.
    403.5
    
    
    Rs.
    1,663.3
    
    
    US$
    38.1Wholesale loan
    
    
    2,589.1
    
    
    
    2,420.9
    
    
    
    55.5Gross impaired loans
    
    
    2,992.6
    
    
    
    4,084.2
    
    
    
    93.6Less: Specific allowance for credit losses
    
    
    2,722.7
    
    
    
    3,492.8
    
    
    
    80.1Impaired loans, net of specific allowance
    
    Rs.
    269.9
    
    
    Rs.
    591.4
    
    
    US$
    13.5Gross impaired loans:without valuation allowance
    
    Rs.
    269.9
    
    
    Rs.
    591.4
    
    
    US$
    13.5with valuation allowance
    
    
    2,722.7
    
    
    
    3,492.8
    
    
    
    80.1Total
    
    Rs.
    2,992.6
    
    
    Rs.
    4,084.2
    
    
    US$
    93.6Gross impaired loans:on accrual status
    
    
    
    
    
    
    
    
    
    
    on non-accrual status
    
    
    2,992.6
    
    
    
    4,084.2
    
    
    
    93.6Total
    
    Rs.
    2,992.6
    
    
    Rs.
    4,084.2
    
    
    US$
    93.6Gross impaired loans by industry:Electronic machinery
    
    Rs.
    639.1
    
    
    Rs.
    679.4
    
    
    US$
    15.6Automotive
    
    
    653.7
    
    
    
    654.3
    
    
    
    15.0Textiles
    
    
    356.2
    
    
    
    239.5
    
    
    
    5.5Iron and steel
    
    
    440.4
    
    
    
    201.5
    
    
    
    4.6Others (none > than 5% of impaired loans)
    
    
    903.2
    
    
    
    2,309.5
    
    
    
    52.9Total
    
    Rs.
    2,992.6
    
    
    Rs.
    4,084.2
    
    
    US$
    93.6
 F-22




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##### Table of Contents



As of March 31,2003
    
    2004
    
    2005
    
    2005(In millions)Average impaired
loans, net of
allowance
    
    Rs.
    609.9
    
    
    Rs.
    476.6
    
    
    Rs.
    430.7
    
    
    US$
    9.9Interest
foregone on
impaired loans
    
    Rs.
    334.0
    
    
    Rs.
    274.2
    
    
    Rs.
    216.7
    
    
    US$
    5.0Interest
income recognized
on impaired loans
    
    Rs.
    7.7
    
    
    Rs.
    31.6
    
    
    Rs.
    0.6
    
    
    US$
    Interest
income recognized
on impaired loans
on a cash basis
    
    Rs.
    1.1
    
    
    Rs.
    31.6
    
    
    Rs.
    0.6
    
    
    US$
    
   As of March 31,2004
    
    2005
    
    2005(In millions)Specific allowance for credit
losses, beginning of period
    
    Rs.
    1,684.3
    
    
    Rs.
    2,722.7
    
    
    US$
    62.4Gross allowance for credit losses
    
    
    2,054.5
    
    
    
    2,655.8
    
    
    
    60.9Allowance no longer required due to:Cash recoveries
    
    
    (300.3
    )
    
    
    (781.7
    )
    
    
    (17.9
    )Write-offs
    
    
    (715.8
    )
    
    
    (1,104.0
    )
    
    
    (25.3
    )Specific allowance for credit
losses, end of period
    
    Rs.
    2,722.7
    
    
    Rs.
    3,492.8
    
    
    US$
    80.1Unallocated allowance for credit
losses, beginning of period
    
    
    182.4
    
    
    
    771.6
    
    
    
    17.7Additions during the period
    
    
    589.2
    
    
    
    1,174.1
    
    
    
    26.9Unallocated allowance for credit
losses, end of period
    
    
    771.6
    
    
    
    1,945.7
    
    
    
    44.6Total allowance for credit
losses, end of period
    
    Rs.
    3,494.3
    
    
    Rs.
    5,438.5
    
    
    US$
    124.7
  Years ended March 31,2003
    
    2004
    
    2005
    
    2005(In millions)Wholesale loans
    
    Rs.
    5,789.1
    
    
    Rs.
    6,875.1
    
    
    Rs.
    8,126.6
    
    
    US$
    186.3Retail loans
    
    
    2,016.2
    
    
    
    4,829.9
    
    
    
    8,304.8
    
    
    
    190.4Total
    
    Rs.
    7,805.3
    
    
    Rs.
    11,705.0
    
    
    Rs.
    16,431.4
    
    
    US$
    376.7
 F-23




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##### Table of Contents



11. Securitizations
  Years ended March 31,2004
    
    2005
    
    2005(In millions)Gross proceeds from new securitizations
    
    Rs.
    5,917.4
    
    
    Rs.
    48,660.0
    
    
    US$
    1,115.5Less: Book value of finance receivables derecognized
    
    
    5,772.0
    
    
    
    48,022.2
    
    
    
    1,100.9Less: Estimated costs of servicing
    
    
    21.6
    
    
    
    15.3
    
    
    
    0.4Pre-tax gains on securitizations
    
    Rs.
    123.8
    
    
    Rs.
    622.5
    
    
    US$
    14.3Cash flow informationCollections against securitized receivables
    
    Rs.
    682.1
    
    
    Rs.
    12,635.7
    
    
    US$
    289.7Payments made to SPEs
    
    
    264.4
    
    
    
    10,666.2
    
    
    
    244.5Cash flows on retained interests
    
    
    21.1
    
    
    
    328.8
    
    
    
    7.5
  For the year ended
    
    For the year endedMarch 31, 2004
    
    March 31, 2005Key assumptions: (rates per annum)Annual prepayment rate
    
    
    6.0
    %
    
    
    6.0
    %Expected credit losses
    
    
    0.7
    %
    
    
    0.5
    %
   As of March 31,2004
    
    2005
    
    2005(In millions)Finance receivables held by SPEs
    
    Rs.
    6,058.9
    
    
    Rs.
    60,263.3
    
    
    US$
    1,381.6Delinquencies
    
    
    2.3
    
    
    
    204.8
    
    
    
    4.7Credit losses
    
    
    
    
    
    
    162.6
    
    
    
    3.7Retained interest in sold receivables, consisting of subordinated
securities
    
    
    259.8
    
    
    
    954.5
    
    
    
    21.9
  As of March 31,2004
    
    2005
    
    2005(In millions)Carrying value/fair value of retained
interestsAnnual prepayment rate:Impact of 10% adverse change
    
    Rs.
    1.2
    
    
    Rs.
    4.2
    
    
    US$
    0.1Impact of 20% adverse change
    
    
    2.5
    
    
    
    8.3
    
    
    
    0.2Expected credit losses:Impact of 10% adverse change
    
    
    2.4
    
    
    
    27.2
    
    
    
    0.6Impact of 20% adverse change
    
    
    4.9
    
    
    
    54.2
    
    
    
    1.2
 F-24




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##### Table of Contents



12. Concentrations of credit risk
   As of March 31, 2004Fair values ofGross
    
    creditCategory
    
    loans
    
    substitutes
    
    Total
    
    %(In millions, except percentages)Automotive manufacturers
    
    Rs.
    18,541.1
    
    
    Rs.
    829.1
    
    
    Rs.
    19,370.2
    
    
    
    9.8
    %Land transport
    
    
    15,396.2
    
    
    
    
    
    
    
    15,396.2
    
    
    
    7.8Heavy engineering
    
    
    6,050.0
    
    
    
    580.9
    
    
    
    6,630.9
    
    
    
    3.3Cement manufacturers
    
    
    1,838.5
    
    
    
    4,509.8
    
    
    
    6,348.3
    
    
    
    3.2Hire purchase
    
    
    3,088.8
    
    
    
    1,409.7
    
    
    
    4,498.5
    
    
    
    2.3Investment and finance
    
    
    1,940.8
    
    
    
    2,550.5
    
    
    
    4,491.3
    
    
    
    2.3Iron and steel
    
    
    3,616.6
    
    
    
    642.2
    
    
    
    4,258.8
    
    
    
    2.1Telecommunications
    
    
    3,744.4
    
    
    
    309.6
    
    
    
    4,054.0
    
    
    
    2.0Drugs and pharmaceuticals
    
    
    3,039.5
    
    
    
    974.5
    
    
    
    4,014.0
    
    
    
    2.0Others (none > than 2%)
    
    
    123,919.5
    
    
    
    5,235.2
    
    
    
    129,154.7
    
    
    
    65.2Total
    
    Rs.
    181,175.4
    
    
    Rs.
    17,041.5
    
    
    Rs.
    198,216.9
    
    
    
    100.0
 As of March 31, 2005Fair values ofGross
    
    creditCategory
    
    Loans
    
    substitutes
    
    Total
    
    Total
    
    %(In millions, except percentages)Land transport
    
    Rs.
    29,860.5
    
    
    Rs.
    --
    
    
    Rs.
    29,860.5
    
    
    US$
    684.6
    
    
    
    10.8
    %Automotive manufacturers
    
    
    25,667.6
    
    
    Rs.
    432.4
    
    
    
    26,100.0
    
    
    
    598.3
    
    
    
    9.5Telecommunications
    
    
    5,369.4
    
    
    
    4,217.5
    
    
    
    9,586.9
    
    
    
    219.8
    
    
    
    3.5Hire purchase and finance
    
    
    5,422.0
    
    
    
    1,470.5
    
    
    
    6,892.5
    
    
    
    158.0
    
    
    
    2.5Iron and steel
    
    
    4,840.1
    
    
    
    910.6
    
    
    
    5,750.7
    
    
    
    131.8
    
    
    
    2.1Others (none > than 2%)
    
    
    190,765.8
    
    
    
    6,849.9
    
    
    
    197,615.7
    
    
    
    4,530.4
    
    
    
    71.6Total
    
    Rs.
    261,925.4
    
    
    Rs.
    13,880.9
    
    
    Rs.
    275,806.3
    
    
    US$
    6,322.9
    
    
    
    100.0
  F-25




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##### Table of Contents



As of March 31, 2004Fair values ofGross
    
    credit
    
    TotalRegion of origination
    
    loans
    
    substitutes
    
    exposure
    
    %(In millions, except percentages)Mumbai
    
    Rs.
    48,004.4
    
    
    Rs.
    7,451.6
    
    
    Rs.
    55,456.0
    
    
    
    28.0
    %Western region, other than
Mumbai
    
    
    31,246.7
    
    
    
    5,664.7
    
    
    
    36,911.4
    
    
    
    18.6Northern region
    
    
    40,084.5
    
    
    
    2,552.7
    
    
    
    42,637.2
    
    
    
    21.5Eastern region
    
    
    17,872.5
    
    
    
    149.3
    
    
    
    18,021.8
    
    
    
    9.1Southern region
    
    
    43,967.3
    
    
    
    1,223.2
    
    
    
    45,190.5
    
    
    
    22.8Total
    
    Rs.
    181,175.4
    
    
    Rs.
    17,041.5
    
    
    Rs.
    198,216.9
    
    
    
    100.0
 As of March 31, 2005Fair values ofGross
    
    credit
    
    Total
    
    TotalRegion of origination
    
    loans
    
    substitutes
    
    exposure
    
    exposure
    
    %(In millions, except percentages)Mumbai
    
    Rs.
    72,690.3
    
    
    Rs.
    10,501.0
    
    
    Rs.
    83,191.3
    
    
    US$
    1,907.2
    
    
    
    30.2
    %Western region, other than
Mumbai
    
    
    53,321.8
    
    
    
    1,795.2
    
    
    
    55,117.0
    
    
    
    1,263.5
    
    
    
    20.0Northern region
    
    
    72,350.5
    
    
    
    1,304.4
    
    
    
    73,654.9
    
    
    
    1,688.6
    
    
    
    26.7Eastern region
    
    
    26,732.9
    
    
    
    
    
    
    
    26,732.9
    
    
    
    612.8
    
    
    
    9.7Southern region
    
    
    36,829.9
    
    
    
    280.3
    
    
    
    37,110.2
    
    
    
    850.8
    
    
    
    13.4Total
    
    Rs.
    261,925.4
    
    
    Rs.
    13,880.9
    
    
    Rs.
    275,806.3
    
    
    US$
    6,322.9
    
    
    
    100.0
 F-26




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##### Table of Contents



As of March 31,2004
    
    2005Non-
    
    
    
    
    
    
    
    
    
    Non-Funded
    
    Funded
    
    Total
    
    Funded
    
    Funded
    
    TotalExposure
    
    Exposure
    
    Exposure
    
    Exposure
    
    Exposure
    
    Exposure(In millions)Borrower 1
    
    Rs.
    7,926.6
    
    
    Rs.
    
    
    
    Rs.
    7,926.6
    
    
    Rs.
    10,646.6
    
    
    Rs.
    
    
    
    Rs.
    10,646.6Borrower 2
    
    
    5,474.8
    
    
    
    
    
    
    
    5,474.8
    
    
    
    6,698.9
    
    
    
    
    
    
    
    6,698.9Borrower 3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,527.5
    
    
    
    940.2
    
    
    
    5,467.7Borrower 4
    
    
    5,295.4
    
    
    
    
    
    
    
    5,295.4
    
    
    
    5,297.7
    
    
    
    60.0
    
    
    
    5,357.7Borrower 5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    300.0
    
    
    
    3,567.5
    
    
    
    3,867.5Borrower 6
    
    
    327.2
    
    
    
    2,850.3
    
    
    
    3,177.5
    
    
    
    743.6
    
    
    
    3,074.2
    
    
    
    3,817.8Borrower 7
    
    
    1,984.5
    
    
    
    550.0
    
    
    
    2,534.5
    
    
    
    1,772.6
    
    
    
    1,875.6
    
    
    
    3,648.2Borrower 8
    
    
    2,496.9
    
    
    
    631.6
    
    
    
    3,128.5
    
    
    
    2,552.2
    
    
    
    898.9
    
    
    
    3,451.1Borrower 9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,266.0
    
    
    
    110.0
    
    
    
    3,376.0Borrower 10
    
    Rs.
    36.7
    
    
    Rs.
    3,250.0
    
    
    Rs.
    3,286.7
    
    
    Rs.
    36.7
    
    
    Rs.
    3,250.0
    
    
    Rs.
    3,286.7
  13. Property and equipment
  As of March 31,2004
    
    2005
    
    2005(In millions)Land and premises
    
    Rs.
    2,508.9
    
    
    Rs.
    2,912.2
    
    
    US$
    66.8Software and systems
    
    
    1,288.7
    
    
    
    1,586.5
    
    
    
    36.4Equipment and furniture
    
    
    6,377.4
    
    
    
    7,968.1
    
    
    
    182.6Property and equipment, at cost
    
    
    10,175.0
    
    
    
    12,466.8
    
    
    
    285.8Less: Accumulated depreciation
    
    
    4,005.9
    
    
    
    5,383.6
    
    
    
    123.4Property and equipment, net
    
    Rs.
    6,169.1
    
    
    Rs.
    7,083.2
    
    
    US$
    162.4
  F-27




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##### Table of Contents



14. Other assets
  As of March 31,2004
    
    2005
    
    2005(In millions)Checks in the course of collection
    
    Rs.
    784.1
    
    
    Rs.
    76.1
    
    
    US$
    1.7Security deposits for leased property
    
    
    753.0
    
    
    
    911.1
    
    
    
    20.9Sundry accounts receivable
    
    
    1,539.6
    
    
    
    1,979.8
    
    
    
    45.4Advance tax (net of provision for taxes)
    
    
    1,297.8
    
    
    
    1,672.0
    
    
    
    38.3Advances
    
    
    364.4
    
    
    
    778.1
    
    
    
    17.8Prepaid expenses
    
    
    845.3
    
    
    
    1,360.5
    
    
    
    31.2Restricted cash/ securitization margin for credit enhancement and
securitized transactions
    
    
    49.6
    
    
    
    845.1
    
    
    
    19.4Other
    
    
    770.5
    
    
    
    1,502.6
    
    
    
    34.5Total
    
    Rs.
    6,404.3
    
    
    Rs.
    9,125.3
    
    
    US$
    209.2
 15. Deposits
  As of March 31,2004
    
    2005
    
    2005(In millions)Interest-bearing:Savings deposits
    
    Rs.
    78,043.0
    
    
    Rs.
    114,183.8
    
    
    US$
    2,617.7Time deposits
    
    
    137,667.8
    
    
    
    143,054.1
    
    
    
    3,279.5Total interest-bearing deposits
    
    
    215,710.8
    
    
    
    257,237.9
    
    
    
    5,897.2Non-interest bearing deposits
    
    
    88,351.2
    
    
    
    106,304.6
    
    
    
    2,437.1Total
    
    Rs.
    304,062.0
    
    
    Rs.
    363,542.5
    
    
    US$
    8,334.3
   F-28




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##### Table of Contents



16. Short-term borrowings
  As of March 31,2004
    
    2005
    
    2005(In millions)Borrowed in the call market
    
    Rs.
    10,582.9
    
    
    Rs.
    33,215.9
    
    
    US$
    761.5Term borrowings from institutions/banks
    
    
    5,880.0
    
    
    
    14,673.1
    
    
    
    336.4Foreign currency borrowings
    
    
    6,601.3
    
    
    
    
    
    
    
    Bills rediscounted
    
    
    1,000.0
    
    
    
    
    
    
    
    Interbank risk participation
    
    
    
    
    
    
    14,190.1
    
    
    
    325.3Total
    
    Rs.
    24,064.2
    
    
    Rs.
    62,079.1
    
    
    US$
    1,423.2Total borrowings outstanding:Maximum amount outstanding
    
    Rs.
    52,274.3
    
    
    Rs.
    62,079.1
    
    
    US$
    1,423.2Average amount outstanding
    
    Rs.
    27,255.3
    
    
    Rs.
    42,594.6
    
    
    US$
    958.7Weighted average interest rate
    
    
    4.3
    %
    
    
    4.1
    %
    
    
    4.1
    %
 17. Long-term debt
  As of March 31,2004
    
    2005
    
    2005(In millions)Subordinated debt
    
    Rs.
    6,000.0
    
    
    Rs.
    5,000.0
    
    
    US$
    114.6Others
    
    
    86.0
    
    
    
    28.1
    
    
    
    0.7Total
    
    Rs.
    6,086.0
    
    
    Rs.
    5,028.1
    
    
    US$
    115.3
  As of March 31,2005
    
    2005(In millions)Due in the fiscal year ending March 31:2006
    
    Rs.
    19.4
    
    
    US$
    0.42007
    
    
    1,003.6
    
    
    
    23.02008
    
    
    2.9
    
    
    
    0.12009
    
    
    2.2
    
    
    
    0.12010
    
    
    
    
    
    
    Thereafter
    
    
    4,000.0
    
    
    
    91.7Total
    
    Rs.
    5,028.1
    
    
    US$
    115.3
 F-29




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##### Table of Contents



18. Accrued expenses and other liabilities
  As of March 312004
    
    2005
    
    2005(In millions)Bills payable
    
    Rs.
    36,672.7
    
    
    Rs.
    15,547.3
    
    
    US$
    356.4Remittances in transit
    
    
    13,540.5
    
    
    
    18,266.0
    
    
    
    418.8Accrued expenses
    
    
    482.7
    
    
    
    485.1
    
    
    
    11.1New account deposits
    
    
    1,752.3
    
    
    
    3,414.7
    
    
    
    78.3Deferred income tax payable, net
    
    
    1,026.8
    
    
    
    
    
    
    
    Accounts payable
    
    
    2,248.9
    
    
    
    4,786.0
    
    
    
    109.7Other
    
    
    1,518.3
    
    
    
    1,124.4
    
    
    
    25.7Total
    
    Rs.
    57,242.2
    
    
    Rs.
    43,623.5
    
    
    US$
    1,000.0
 19. Income taxes
  Years ended March 31,2003
    
    2004
    
    2005
    
    2005(In millions)Current income tax expense
    
    Rs.
    1,832.5
    
    
    Rs.
    2,427.2
    
    
    Rs.
    3,338.9
    
    
    US$
    76.6Deferred income tax benefit
    
    
    (102.8
    )
    
    
    (588.4
    )
    
    
    (213.5
    )
    
    
    (4.9
    )Income tax expense
    
    Rs.
    1,729.7
    
    
    Rs.
    1,838.8
    
    
    Rs.
    3,125.4
    
    
    US$
    71.7
 F-30




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##### Table of Contents



Years ended March 31,2003
    
    2004
    
    2005
    
    2005(In millions)Net income before taxes
    
    Rs.
    5,243.5
    
    
    Rs.
    6,593.3
    
    
    Rs.
    9,735.1
    
    
    US$
    223.2Effective statutory income tax rate
    
    
    36.75
    %
    
    
    35.87
    %
    
    
    36.59
    %
    
    
    Expected income tax expense
    
    
    1,927.0
    
    
    
    2,365.4
    
    
    
    3,562.3
    
    
    
    81.7Adjustments to reconcile expected income tax to
actual tax expense:Permanent differences:Stock based compensation
(net of forfeitures)
    
    
    50.3
    
    
    
    48.5
    
    
    
    113.5
    
    
    
    2.6Income exempt from taxes
    
    
    (273.1
    )
    
    
    (529.4
    )
    
    
    (504.7
    )
    
    
    (11.6
    )Other, net
    
    
    6.8
    
    
    
    (17.9
    )
    
    
    (66.2
    )
    
    
    (1.5
    )Effect of change in statutory tax rate
    
    
    18.7
    
    
    
    (27.8
    )
    
    
    20.5
    
    
    
    0.5Income tax expense
    
    Rs.
    1,729.7
    
    
    Rs.
    1,838.8
    
    
    Rs.
    3,125.4
    
    
    US$
    71.7
  As of March 31,2004
    
    2005
    
    2005(In millions)Tax Effect of:Deductible temporary differences:Allowance for loan losses
    
    Rs.
    1,107.5
    
    
    Rs.
    1,951.8
    
    
    US$
    44.7Minimum alternate tax credit
    
    
    23.1
    
    
    
    23.6
    
    
    
    0.5Other
    
    
    141.0
    
    
    
    221.6
    
    
    
    5.1Deferred tax asset
    
    
    1,271.6
    
    
    
    2,197.0
    
    
    
    50.3Taxable temporary differences:Property and equipment
    
    
    959.1
    
    
    
    1,070.7
    
    
    
    24.5Unrealized gain on securities available for sale
    
    
    1,291.1
    
    
    
    842.3
    
    
    
    19.3Unrealized gain on investments transferred to held to maturity
category
    
    
    33.5
    
    
    
    Debt issue expenses
    
    
    14.7
    
    
    
    196.6
    
    
    
    4.5Deferred tax liability
    
    
    2,298.4
    
    
    
    2,109.6
    
    
    
    48.3Net deferred tax (asset)/ liability
    
    Rs.
    1,026.8
    
    
    Rs.
    (87.4
    )
    
    US$
    (2.0
    )
   F-31




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##### Table of Contents



20. Stock based compensation
  Employees Stock Option Scheme:
      Options available to be grantedYears ended March 31,2003
    
    2004
    
    2005Options available to be
granted, beginning of year
    
    
    1,534,200
    
    
    
    2,048,300
    
    
    
    1,585,800Equity shares allocated for
grant under the plan
    
    
    
    
    
    
    10,000,000
    
    
    
    Options granted
    
    
    
    
    
    
    (10,993,000
    )
    
    
    Options forfeited/lapsed
    
    
    514,100
    
    
    
    530,500
    
    
    
    1,846,400Options available to be
granted, end of year
    
    
    2,048,300
    
    
    
    1,585,800
    
    
    
    3,432,200
  Years ended March 31,2003
    
    2004
    
    2005Weighted
    
    
    
    
    
    Weighted
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    Average
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    Exercise
    
    
    
    
    
    ExerciseOptions
    
    Price
    
    Options
    
    Price
    
    Options
    
    PriceOptions outstanding, beginning of year
    
    
    7,788,100
    
    
    Rs.
    189.48
    
    
    
    6,602,900
    
    
    Rs.
    193.07
    
    
    
    14,319,400
    
    
    Rs.
    325.42Options granted
    
    
    
    
    
    
    
    
    
    
    10,993,000
    
    
    
    360.98
    
    
    
    
    
    
    
    Options exercised
    
    
    (671,100
    )
    
    
    132.00
    
    
    
    (2,746,000
    )
    
    
    163.90
    
    
    
    (2,159,500
    )
    
    
    215.73Options forfeited
    
    
    (514,100
    )
    
    
    218.48
    
    
    
    (530,500
    )
    
    
    251.07
    
    
    
    (1,846,400
    )
    
    
    345.01Options outstanding, end of year
    
    
    6,602,900
    
    
    Rs.
    193.07
    
    
    
    14,319,400
    
    
    Rs.
    325.42
    
    
    
    10,313,500
    
    
    Rs.
    344.88Weighted average fair value of options granted
during the year
    
    
    
    
    
    Rs.
    
    
    
    
    
    
    
    Rs.
    374.10
    
    
    
    
    
    
    Rs.
    
 F-32




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##### Table of Contents



Employees Welfare Trust
     Years ended March 31,2003
    
    2004
    
    2005Grants available to be allotted, beginning of year
    
    
    1,244,775
    
    
    
    1,250,775
    
    
    
    276,775Grants allotted
    
    
    (15,000
    )
    
    
    (974,000
    )
    
    
    (4,700
    )Grants sold in open market
    
    
    
    
    
    
    
    
    
    
    (272,075
    )Grants cancelled
    
    
    21,000
    
    
    
    
    
    
    
    Grants available to be allotted, end of year
    
    
    1,250,775
    
    
    
    276,775
    
    
    
    
  As of March 31,2003
    
    2004
    
    2005Weighted
    
    
    
    
    
    Weighted
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    Average
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    Exercise
    
    
    
    
    
    ExerciseGrants
    
    Price
    
    Grants
    
    Price
    
    Grants
    
    PriceGrants allotted , beginning of year
    
    
    1,097,000
    
    
    Rs.
    38.64
    
    
    
    1,076,000
    
    
    Rs.
    38.64
    
    
    
    1,670,500
    
    
    Rs.
    42.93New grants
    
    
    15,000
    
    
    
    35.00
    
    
    
    974,000
    
    
    
    46.00
    
    
    
    4,700
    
    
    
    43.00Grants exercised
    
    
    (15,000
    )
    
    
    35.00
    
    
    
    (379,500
    )
    
    
    38.64
    
    
    
    (1,675,200
    )
    
    
    42.60Grants cancelled
    
    
    (21,000
    )
    
    
    38.64
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Grants allotted, end of year
    
    
    1,076,000
    
    
    Rs.
    38.64
    
    
    
    1,670,500
    
    
    Rs.
    42.93
    
    
    
    
    
    
    Rs.
    Weighted average fair value of grants
allotted during the year
    
    
    
    
    
    Rs.
    229.70
    
    
    
    
    
    
    Rs.
    299.25
    
    
    
    
    
    
    Rs.
    402.00
 F-33




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##### Table of Contents



As of March 31, 2005Number of
    
    Weighted
    
    WeightedShares Arising
    
    Average
    
    AveragePlan
    
    Range of exercise price
    
    out of Options
    
    Remaining Life
    
    Exercise pricePlan A
    
    Rs.131.33 to Rs.226.96 (or US$3.0 to US$5.2 )
    
    
    1,141,900
    
    
    
    
    
    
    
    214.38Plan B
    
    Rs. 358.60 to Rs. 366.30 (or US$8.3 to US$8.4)
    
    
    9,171,600
    
    
    
    1.14
    
    
    
    361.13
 21. Share Capital
  22. Retirement benefits
 Gratuity
   As of March 31,2004
    
    2005
    
    2005(In millions)Change in benefit obligations:Projected benefit obligation (PBO), beginning of the period
    
    Rs.
    65.0
    
    
    Rs.
    103.1
    
    
    US$
    2.4Service cost
    
    
    16.7
    
    
    
    14.2
    
    
    
    0.3Interest cost
    
    
    4.7
    
    
    
    7.4
    
    
    
    0.2Actuarial loss
    
    
    21.1
    
    
    
    24.1
    
    
    
    0.6Benefits paid
    
    
    (4.4
    )
    
    
    (6.1
    )
    
    
    (0.1
    )Projected benefit obligation, end of the period
    
    
    103.1
    
    
    
    142.7
    
    
    
    3.4Change in plan assets:Fair value of plan assets, beginning of the period
    
    
    30.9
    
    
    
    53.0
    
    
    
    1.2Actual return on plan assets
    
    
    2.9
    
    
    
    4.5
    
    
    
    0.1Employer contributions
    
    
    20.4
    
    
    
    16.1
    
    
    
    0.4Benefits paid
    
    
    (4.4
    )
    
    
    (6.1
    )
    
    
    (0.1
    )Actuarial (loss) gain
    
    
    3.2
    
    
    
    (1.4
    )
    
    
    Fair value of plan assets, end of the period
    
    
    53.0
    
    
    
    66.1
    
    
    
    1.6Accrued benefit
    
    Rs.
    (50.1
    )
    
    Rs.
    (76.6
    )
    
    US$
    (1.8
    )
 F-34




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##### Table of Contents



Years ended March 31,2003
    
    2004
    
    2005
    
    2005(In millions)Service cost
    
    Rs.
    11.6
    
    
    Rs.
    16.7
    
    
    Rs.
    14.2
    
    
    US$
    0.3Interest cost
    
    
    3.0
    
    
    
    4.7
    
    
    
    7.4
    
    
    
    0.2Expected return on plan assets
    
    
    (2.5
    )
    
    
    (2.7
    )
    
    
    (4.2
    )
    
    
    (0.1
    )Actuarial (gain) loss
    
    
    (2.5
    )
    
    
    14.6
    
    
    
    26.7
    
    
    
    0.6Net gratuity cost
    
    Rs.
    9.6
    
    
    Rs.
    33.3
    
    
    Rs.
    44.1
    
    
    US$
    1.0
  Years ended March 31,2003
    
    2004
    
    2005(%)Discount rate
    
    
    9.0
    
    
    
    7.0
    
    
    
    7.0Rate of increase in compensation levels
of covered employees
    
    
    10.0
    
    
    
    10.0
    
    
    
    10.0Rate of return on plan assets
    
    
    8.0
    
    
    
    6.5
    
    
    
    6.5
  Years ending March 31,
    
    Benefit Payments(In millions)2006
    
    Rs.
    1.12007
    
    
    2.82008
    
    
    1.42009
    
    
    9.22010
    
    
    3.4
 Superannuation
  Provident fund
  F-35




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23. Financial instruments
 Foreign exchange and derivative contracts
      As of March 31,2004
    
    2005
    
    2005Fair
    
    
    
    
    
    Fair
    
    
    
    
    
    FairNotional
    
    Value
    
    Notional
    
    Value
    
    Notional
    
    Value(In millions)Interest rate swaps
and forward rate
agreements
    
    Rs.
    343,913.7
    
    
    Rs.
    (15.4
    )
    
    Rs.
    780,211.6
    
    
    Rs.
    (79.7
    )
    
    US$
    17,886.6
    
    
    US$
    (1.8
    )Forward exchange
contracts, currency
swaps, currency
options and
interest rate caps
and floors
    
    
    439,917.0
    
    
    
    503.3
    
    
    
    571,445.0
    
    
    
    731.2
    
    
    
    13,100.5
    
    
    
    16.8
 Guarantees
   F-36




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##### Table of Contents



As of March 31,2004
    
    2005
    
    2005(In millions)Nominal values:Bank guarantees:Financial guarantees
    
    Rs.
    7,497.0
    
    
    Rs.
    14,365.4
    
    
    US$
    329.3Performance guarantees
    
    
    8,916.8
    
    
    
    9,954.4
    
    
    
    228.2Documentary credits
    
    
    18,921.0
    
    
    
    27,930.2
    
    
    
    640.3Total
    
    Rs.
    35,334.8
    
    
    Rs.
    52,250.0
    
    
    US$
    1,197.8Estimated fair values:Guarantees
    
    Rs.
    (98.4
    )
    
    Rs.
    (145.4
    )
    
    US$
    (3.3
    )Documentary credits
    
    
    (30.3
    )
    
    
    (44.7
    )
    
    
    (1.0
    )Total
    
    Rs.
    (128.7
    )
    
    Rs.
    (190.1
    )
    
    US$
    (4.3
    )
  Loan sanction letters
  24. Estimated fair value of financial instruments
  Financial instruments valued at carrying value:
  F-37




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##### Table of Contents



Trading securities:
  Available for sale securities:
  Held to maturity securities:
  Loans:
    Deposits:
  Long-term debt:
  Term Placements:
  F-38




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##### Table of Contents



As of March 31,2004
    
    2005Carrying
    
    Estimated
    
    Carrying
    
    Estimatedvalue
    
    fair value
    
    value
    
    fair value(In millions)Financial Assets:Cash and cash equivalents
    
    Rs.
    33,010.4
    
    
    Rs.
    33,010.4
    
    
    Rs.
    37,575.8
    
    
    Rs.
    37,575.8Term placements
    
    
    3,565.2
    
    
    
    3,721.0
    
    
    
    8,699.6
    
    
    
    8,530.0Investments held to maturity
    
    
    36,368.4
    
    
    
    40,208.9
    
    
    
    
    
    
    
    Investments held for trading
    
    
    6,233.8
    
    
    
    6,233.8
    
    
    
    1,278.5
    
    
    
    1,278.5Investments available for sale
    
    
    133,274.6
    
    
    
    133,274.6
    
    
    
    204,292.8
    
    
    
    204,292.8Securities purchased under agreements to resell
    
    
    19,950.0
    
    
    
    19,950.0
    
    
    
    
    
    
    
    Loans
    
    
    177,681.1
    
    
    
    177,765.0
    
    
    
    256,486.9
    
    
    
    255,933.0Accrued interest receivable
    
    
    4,178.7
    
    
    
    4,178.7
    
    
    
    4,912.1
    
    
    
    4,912.1Financial Liabilities:Interest-bearing deposits
    
    
    215,710.8
    
    
    
    214,715.3
    
    
    
    257,237.9
    
    
    
    257,819.6Non-interest bearing deposits
    
    
    88,351.2
    
    
    
    88,351.2
    
    
    
    106,304.6
    
    
    
    106,304.6Securities sold under repurchase agreements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Short-term borrowings
    
    
    24,064.2
    
    
    
    24,064.2
    
    
    
    62,079.1
    
    
    
    62,079.1Accrued interest payable
    
    
    4,165.4
    
    
    
    4,165.4
    
    
    
    5,843.0
    
    
    
    5,843.0Long-term debt
    
    
    6,086.0
    
    
    
    6,499.9
    
    
    
    5,028.1
    
    
    
    4,582.4Accrued expenses and other liabilities
    
    
    57,242.2
    
    
    
    57,242.2
    
    
    
    43,536.1
    
    
    
    43,536.1
 25. Segment Information
       F-39




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##### Table of Contents



Years ended March 31,2003
    
    2004
    
    2005Retail
    
    Wholesale
    
    Treasury
    
    
    
    
    
    Retail
    
    Wholesale
    
    Treasury
    
    
    
    
    
    Retail
    
    Wholesale
    
    TreasuryBanking
    
    Banking
    
    Services
    
    Total
    
    Banking
    
    Banking
    
    Services
    
    Total
    
    Banking
    
    Banking
    
    Services
    
    Total(In millions)Net interest revenue
    
    Rs.
    4,530.3
    
    
    Rs.
    2,155.0
    
    
    Rs.
    960.3
    
    
    Rs.
    7,645.6
    
    
    Rs.
    7,159.7
    
    
    Rs.
    5,112.3
    
    
    Rs.
    336.4
    
    
    Rs.
    12,608.4
    
    
    Rs.
    9,728.3
    
    
    Rs.
    5,658.7
    
    
    Rs.
    598.7
    
    
    Rs.
    15,985.7Allowance for
credit losses
    
    
    122.7
    
    
    
    618.8
    
    
    
    
    
    
    
    741.5
    
    
    
    918.5
    
    
    
    1,424.9
    
    
    
    
    
    
    
    2,343.4
    
    
    
    2,925.4
    
    
    
    122.8
    
    
    
    
    
    
    
    3,048.2Net interest
revenue,
after allowance
for credit losses
    
    
    4,407.6
    
    
    
    1,536.2
    
    
    
    960.3
    
    
    
    6,904.1
    
    
    
    6,241.2
    
    
    
    3,687.4
    
    
    
    336.4
    
    
    
    10,265.0
    
    
    
    6,802.9
    
    
    
    5,535.9
    
    
    
    598.7
    
    
    
    12,937.5Non-interest
revenue
    
    
    1,742.6
    
    
    
    1,467.8
    
    
    
    1,186.9
    
    
    
    4,397.3
    
    
    
    2,606.7
    
    
    
    965.8
    
    
    
    1,125.1
    
    
    
    4,697.6
    
    
    
    6,234.1
    
    
    
    1,656.5
    
    
    
    320.9
    
    
    
    8,211.5Non-interest
expense
    
    
    (4,350.4
    )
    
    
    (1,182.1
    )
    
    
    (525.4
    )
    
    
    (6,057.9
    )
    
    
    (6,250.0
    )
    
    
    (1,521.5
    )
    
    
    (597.8
    )
    
    
    (8,369.3
    )
    
    
    (8,889.3
    )
    
    
    (1,823.7
    )
    
    
    (700.9
    )
    
    
    (11,413.9
    )Income before
income tax
    
    Rs.
    1,799.8
    
    
    Rs.
    1,821.9
    
    
    Rs.
    1,621.8
    
    
    Rs.
    5,243.5
    
    
    Rs.
    2,597.9
    
    
    Rs.
    3,131.7
    
    
    Rs.
    863.7
    
    
    Rs.
    6,593.3
    
    
    Rs.
    4,147.7
    
    
    Rs.
    5,368.7
    
    
    Rs.
    218.7
    
    
    Rs.
    9,735.1Segment assets:Segment average
total assets
    
    Rs.
    79,682.3
    
    
    Rs.
    172.541.6
    
    
    Rs.
    28,289.5
    
    
    Rs.
    107,971.8
    
    
    Rs.
    142,643.0
    
    
    Rs.
    178,753.3
    
    
    Rs.
    42,907.2
    
    
    Rs.
    364,303.5
    
    
    Rs.
    197,121.9
    
    
    Rs.
    224,054.3
    
    
    Rs.
    26,076.1
    
    
    Rs.
    421,176.2
 26. Commitments and contingent liabilities
  Capital commitments
  Contingencies
  27. Related party transactions
  F-40




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As of March 31,2004
    
    2005
    
    2005(In millions)Balances in current account
    
    Rs.
    1,098.2
    
    
    Rs.
    141.2
    
    
    US$
    3.2Balances in fixed deposits
    
    
    293.6
    
    
    
    272.1
    
    
    
    6.2Long-term debt
    
    
    27.5
    
    
    
    
    
    
    
    Accounts payable
    
    
    13.6
    
    
    
    73.8
    
    
    
    1.7Total
    
    Rs.
    1,432.9
    
    
    Rs.
    487.1
    
    
    US$
    11.1
  Years ended March 31,2004
    
    2005
    
    2005(In millions)Deposits to secure leased property
    
    Rs.
    22.9
    
    
    Rs.
    23.6
    
    
    US$
    0.5Loans and overdrafts
    
    
    11.6
    
    
    
    2.5
    
    
    
    0.1Loans to officers and employees
    
    
    835.3
    
    
    
    935.2
    
    
    
    21.4Capital advances
    
    
    2.3
    
    
    
    
    
    
    
    Other deposits
    
    
    46.8
    
    
    
    46.1
    
    
    
    1.1Total
    
    Rs.
    918.9
    
    
    Rs.
    1,007.4
    
    
    US$
    23.1
   Years ended March 31,2003
    
    2004
    
    2005(In millions)Service charges income
    
    Rs.
    29.9
    
    
    Rs.
    118.6
    
    
    Rs.
    438.8Service charges expense
    
    
    (13.9
    )
    
    
    (19.3
    )
    
    
    (31.3
    )Outsourcing charges
    
    
    (594.8
    )
    
    
    (798.5
    )
    
    
    (1,561.7
    )Interest income
    
    
    34.7
    
    
    
    23.9
    
    
    
    Rent and maintenance expense
    
    
    (18.3
    )
    
    
    (17.0
    )
    
    
    (15.8
    )Net expense incurred to
related parties for
service provided
    
    Rs.
    (562.4
    )
    
    Rs.
    (692.3
    )
    
    Rs.
    (1,170.0
    )
  F-41




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##### Table of Contents



28. Regulatory Capital and Capital Adequacy
   As of March 31,2004
    
    2005
    
    2005(In millions)Tier 1 capital
    
    Rs.
    22,297.0
    
    
    Rs.
    39,621.6
    
    
    US$
    908.3Tier 2 capital
    
    
    10,081.2
    
    
    
    10,547.3
    
    
    
    241.8Total capital
    
    Rs.
    32,378.2
    
    
    Rs.
    50,168.9
    
    
    US$
    1,150.1Total risk weighted assets and contingents
    
    Rs.
    277,738.2
    
    
    Rs.
    412,710.3
    
    
    US$
    9,461.5Capital ratios of the Bank:Tier 1
    
    
    8.03
    %
    
    
    9.60
    %
    
    
    9.60
    %Total capital
    
    
    11.66
    %
    
    
    12.16
    %
    
    
    12.16
    %Minimum capital ratios required by the RBI:Tier 1
    
    
    4.50
    %
    
    
    4.50
    %
    
    
    4.50
    %Total capital
    
    
    9.00
    %
    
    
    9.00
    %
    
    
    9.00
    %
 Dividends
  29. Earnings per equity share
  As of March 31,2003
    
    2004
    
    2005Weighted average number of
equity shares used in
computing basic earnings per
equity share
    
    
    279,596,510
    
    
    
    281,856,152
    
    
    
    290,145,339Effect of potential equity
shares for stock options
outstanding
    
    
    1,795,656
    
    
    
    2,863,744
    
    
    
    2,317,669Weighted average number of
equity shares used in
computing diluted earnings
per equity share
    
    
    281,392,166
    
    
    
    284,719,896
    
    
    
    292,463,008
  F-42




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##### Table of Contents



Years ended March 31,2003
    
    2004
    
    2005Basic earnings per share
    
    Rs.
    12.57
    
    
    Rs.
    16.87
    
    
    Rs.
    22.78Effect of potential equity shares for stock options
outstanding
    
    
    0.06
    
    
    
    0.17
    
    
    
    0.18Diluted earnings per share
    
    Rs.
    12.51
    
    
    Rs.
    16.70
    
    
    Rs.
    22.60Basic earnings per ADS
    
    Rs.
    37.71
    
    
    Rs.
    50.61
    
    
    Rs.
    68.34Effect of potential equity shares for stock options
outstanding
    
    
    0.18
    
    
    
    0.51
    
    
    
    0.54Diluted earnings per ADS
    
    Rs.
    37.53
    
    
    Rs.
    50.10
    
    
    Rs.
    67.80
 F-43




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##### Table of Contents



SIGNATURES
   HDFC Bank
Limited/s/ Vinod G. YennemadiName:
Vinod G. YennemadiTitle:
Group Head  Finance,Administration, Legal and Secretarial




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##### Table of Contents



INDEX
OF EXHIBITS
 ExhibitNo.1
    
    Certificate of Incorporation and Memorandum and Articles of Association, as amended (incorporated by
reference to HDFC Bank Limiteds Registration Statement on Form F-1 filed on July 12, 2001 (Registration No. 333-13718)).12.1
    
    Certification by Managing Director required by Rule 13a-14(a).12.2
    
    Certification by Chief Financial
Officer required by Rule 13a-14(a).13
    
    Certification by Managing Director
and Chief Financial Officer required by Rule 13a-14(b) and Section 1350 of
Chapter 63 of Title 18 of the United States Code.
 HDFC Bank Limited agrees to furnish to the Securities and Exchange Commission, upon its
request, the instruments relating to long-term debt for securities authorized thereunder that do
not exceed 10% of HDFC Bank Limiteds total assets.