The rating on HDFC Bank Ltd. takes into account the bank's strong earnings, led by low funding costs and a solid franchise, robust asset quality, and strong capitalization. The rating is constrained by the operating environment in India, where the bank has its predominant operations. Standard&Poor's tends not to rate banks above the sovereign rating on India (BBB-/Stable/A-3) because of the direct and indirect influence that a sovereign in distress would have on a bank's operations, including its ability to service foreign-currency obligations. HDFC Bank is a mid-sized bank in India with a strong franchise. As at June 30, 2008, it had Indian rupee (INR) 1.7 trillion in assets, which includes those from Centurion Bank of Punjab (CBoP),
