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IndusInd Bank: Digital Banking Pioneer Since 1994

Introduction

This comprehensive overview traces the remarkable journey of IndusInd Bank from its inception in 1994 through to 2022, highlighting its strategic milestones, technological advancements, and significant partnerships.

Established with the vision of offering a wide range of banking and financial services, IndusInd Bank commenced operations with the backing of IndusInd Enterprises and Finance Ltd. (IEFL) and a consortium of Mauritius-based companies.

The bank quickly distinguished itself by embracing technology and innovation, launching commercial operations and an array of services that catered to diverse banking needs.

The mid-90s saw the bank issuing equity shares and forging strategic alliances to enhance its service quality to global standards.

Notably, its collaboration with Kredietbank NV of Brussels marked a pivotal step towards international recognition. IndusInd Bank’s commitment to innovation was further demonstrated through the introduction of 'anywhere banking' and 'Fast Forex', setting a new benchmark for convenience and efficiency in banking services.

Entering the new millennium, the bank expanded its product offerings and embraced digital transformation, launching Internet banking and a suite of technologically advanced services.

Strategic partnerships with leading global and domestic entities, including HSBC and Tata Consultancy Services, underscored its commitment to offering sophisticated financial solutions.

The bank's forward-thinking approach continued with the introduction of mobile banking services and a focus on digital channels, significantly enhancing customer experience.

Throughout the first two decades of the 21st century, IndusInd Bank has remained at the forefront of banking innovation. Its initiatives, ranging from the launch of digital branches to partnerships for sustainable finance, reflect a holistic approach to banking that prioritizes customer convenience, technological advancement, and inclusive financial services.

This journey underscores IndusInd Bank’s evolution from a nascent banking entity into a dynamic, technologically advanced institution, poised for future growth and continued innovation in the banking sector.

History of IndusInd Bank

1994:

In January, the bank was established and received its Certificate of Commencement of Business in February. IndusInd Enterprises and Finance Ltd. (IEFL) along with five Mauritius-based entities, namely IndusInd International Holdings Ltd. (IIHL), IndusInd (Mauritius) Holdings Ltd. (IMHL), IndusInd Ltd. (IL), IndusInd Investments Ltd. (IIL), and DeFive Mauritius Holdings Ltd. (DFMHL), were the promoters. Commercial operations began in April, covering all banking services.
Plans were made to create an investment banking subsidiary focusing on areas such as issue management, corporate advisory services, infrastructure financing, mergers and acquisitions, and trading and depository services. The introduction of investment boutiques was also planned at select branches in Ahmedabad, Chennai, Mumbai, and others.
All branches were equipped with direct SWIFT system access to Nostro Accounts for international transactions.

1995:

Issued 1.2 billion equity shares.
Formed a strategic alliance with Kredietbank NV, Brussels, Belgium, to elevate its global capabilities.
Offered 20 million preferential equity shares at Rs. 10 each at a premium of Rs. 40 per share to shareholders (excluding promoters), shareholders of promoter companies, and employees, raising Rs. 100 crores.

1996:

Established a state-of-the-art dealing room in Nariman Point, Mumbai, enhancing investment profitability.
Expanded NRI customer base across 40 countries with deposits of Rs 905 crores.
Expanded branch network from 9 to 18.

1997:

Publicly issued 400 million equity shares at Rs 10 each with a Rs 35 premium.
Launched 'anywhere banking', offering customers unified banking services.
Introduced Fast Forex for expedited international remittances through SBC Warburg.
Shares were dematerialized under an agreement with Spectrum Corporate Services and NSDL.

1998:

Launched Internet banking on March 24, offering an alternative to traditional branch banking, ATM, and tele-banking services.
Introduced Fast Forex for rapid global fund transfers.
Launched net banking, accessible at www.indusind.com.

1999:

Became the official banker to the National Stock Exchange through an agreement with National Securities Clearing Corporation Ltd.
Introduced advanced products like Fast Forex, anywhere banking, Internet banking, and depository services.

2000:

Entered a memorandum of understanding with HSBC for global credit card issuance under MasterCard.
Launched FAST Forex for international remittances.
Partnered with Tata Consultancy Services for asset-liability management (ALM) implementation.
Collaborated with Orange for SMS-based mobile banking in Mumbai.
Acquired BASE24-ATM switch through an agreement with Financial Software and Systems.
Opened its 28th branch in Surat, Gujarat, and launched a global credit card in association with HongKong and Shanghai Banking Corporation Ltd. under MasterCard.
Introduced eTrading, an e-broking platform, in Mumbai for online equity trading.
Allied with Kothari Pioneer Mutual Fund.

2001:

Formed a strategic alliance with Sri Lanka-based National Mercantile Bank.

2002:

Appointed Mr. S Venkitramanan as Non-executive Chairman, pending Reserve Bank of India approval.

2003:

Received RBI approval for overseas offices.
Achieved ISO 9001:2000 certification for all branches in its 10th year.
Hired KPMG Consulting for enterprise-wide risk management framework development.
Delisted from Pune Stock Exchange and signed an ATM sharing agreement with Corporation Bank.
Approved the merger scheme with Ashok Leyland Finance.

2004:

Received approval for delisting from Pune Stock Exchange effective January 16, 2004.
Launched Indus AIM for RTGS transactions on April 30.
Accepted Mr. Gopal Lohiya's resignation as Company Secretary effective July 5, 2004.
Appointed Nagarajan as Joint MD and offered personal loans to Global Trust Bank salary account holders.
Entered an agreement with the Delhi Development Authority (DDA).

2005-2022:

Expanded branch network and introduced various banking innovations, including digital banking services, partnerships for financial inclusion, and awards for technology use and improvement. Engaged in strategic alliances with other banks, corporations, and government entities to enhance banking services and accessibility, including digital and mobile banking, remittances, and sustainable finance initiatives.

Conclusion

In reflecting on the expansive trajectory of IndusInd Bank from its foundation in 1994 to the present day, it's evident that the institution has not only grown in scale but has also significantly influenced the banking sector's evolution in India.

Through strategic foresight, IndusInd Bank has navigated the complexities of the financial industry, adapting to changes and seizing opportunities to innovate and expand.

The bank's early adoption of technology and its continuous efforts to enhance customer service through digital platforms have set it apart in a competitive landscape.

The bank's journey highlights a series of strategic partnerships and expansions that have broadened its reach and services, catering to a diverse clientele.

From issuing equity shares and establishing alliances with international banks to adopting cutting-edge technology for banking solutions, IndusInd Bank has demonstrated resilience and adaptability.

Its initiatives in Internet banking, mobile banking, and the introduction of digital branches reflect a commitment to leveraging technology for convenience and efficiency.

Moreover, IndusInd Bank's focus on inclusive banking, through products like 'Fast Forex' and initiatives for sustainable finance, illustrates its commitment to serving the broader societal needs and contributing to economic development.

The partnerships with various entities, from telecom companies to global financial institutions, have enabled IndusInd Bank to offer a wide range of services and penetrate deeper into the market.

As IndusInd Bank continues to evolve, its journey from a nascent bank to a key player in the Indian banking sector is a testament to its strategic vision, innovation, and commitment to excellence.

The bank's ability to blend traditional banking with modern technological advancements sets a benchmark for others in the industry.

Looking forward, IndusInd Bank's trajectory promises further innovation, expansion, and a continued focus on delivering exceptional value to its customers, stakeholders, and the broader community it serves.