The counterparty credit rating on HDFC Bank Ltd. reflects 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 a majority of its operations. Standard&Poor's Ratings Services 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 the seventh-largest commercial bank in India and has a strong franchise. As at Dec. 31, 2009, it had Indian rupee (INR) 2 trillion in assets, including those from
