NEW DELHI: The mega-merger of the HDFC Bank and its parent company the Housing And Development Finance Corporation (HDFC) was one of the biggest news from the banking sector recently. The merger has made HDFC the 4th largest bank in the world and brought the spotlight back on Hasmukh Thakordas Parekh – the man who was the pioneer of Housing Finance in India and founded the Housing Development Finance Corporation in 1977. HDFC – the brainchild of Hasmukh Thakordas Parekh – has since come a long way, overcoming several obstacles in the evolution from a fledging start-up to India’s leading provider of Housing Finance. For his invaluable contribution to the housing finance industry and the banking sector in India, Parekh was awarded the Padma Bhushan by the Government of India in 1992. The London School of Economics also conferred on him an honorary fellowship.
Inspiring Story of Hasmukh Thakordas Parekh
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Hasmukh Thakordas Parekh was born on 10 March 1911 in a banking family in Surat, Gujarat. He inherited the Gujarati business acumen from his father. However, he was deeply influenced by his mother. While growing up in a Mumbai chawl along with his family, Parekh did some part-time jobs and graduated in Economics from Mumbai University. He later went to the London School of Economics from where he pursued a B.Sc. degree in Banking & Finance.
After returning to India in 1936, Parekh began his financial career with a leading stock broking firm, Harkisandass Lukhmidass. Simultaneously, he also worked as a lecturer in Economics at St. Xavier’s College in Mumbai for about three years. He later revealed how his two-decade-long stint at the broking firm shaped his career and gave him his most basic lessons in the business.
First Stint With ICICI
His first big break came in 1956 when he joined ICICI as Deputy general manager and became chairman and managing director in 1972. He retired in 1976 and served as Chairman of ICICI’s Board until 1978.
Parekh, who wanted middle-class Indians to have the chance to build a home before they were too old, founded Housing Development Finance Corporation Limited (HDFC), India’s first retail housing finance company, at the age of 65 in 1977. This was soon after he retired as the chairman of the Industrial Credit and Investment Corporation of India (ICICI).
He founded the HDFC – India’s first retail housing finance company – with a personal contribution of Rs 10,000 and without any financial assistance from the Government of India. Under Parekh’s dynamic leadership and direction, HDFC grew manifolds as a company which was also firmly rooted in the principles of integrity, transparency and professionalism.
A Team Builder
Parekh, who had a keen eye for talent and nurtured it by providing direction and ample learning opportunities, believed in the power of teamwork. He believed that the success of an organization was possible only with a group of dedicated professionals who shared a common goal to serve and were willing to take reasonable risks.
From disbursing the first home loan in 1978, the HDFC was approving annual loans in excess of Rs 100 crore by 1984. With his efforts, HDFC soon became a role model in the housing finance sector in the entire Asian region. His dream of providing better housing and living conditions for people was accomplished with an organization that was modelled by its international peers but with an Indian heart at the core.
In 1983, he promoted the first private-sector oil exploration company in India, Hindustan Oil Exploration Company Limited (HOEC). He also set up Gujarat Rural Housing Finance Corporation Limited (GRUH) in 1986, an institutional structure for providing rural housing finance in villages and small towns. Parekh also served as the Chairman of the IMC Economic Research and Training Foundation for nearly 16 years.
In recognition of his accomplishments, the Government of India conferred the Padma Bhushan honour on Parekh in 1992. Parekh passed away on November 18, 1994, marking the end of an era for HDFC as well as the Indian financial world. The merger of the HDFCs, the original housing finance company and its offspring, has created a financial powerhouse, a banking giant with a market capitalisation of Rs 4.14 lakh crore making the HDFC Bank the 4th largest bank in the world.