The counterparty credit rating on HDFC Bank Ltd. reflects the bank's strong domestic franchise, as indicated by its low funding costs and strong earnings, good capitalization, and robust asset quality. The rating is constrained by the challenging operating environment in India, which subjects the bank to latent credit risks. HDFC Bank is the seventh-largest commercial bank in India, with Indian rupee (INR) 2.49 trillion in assets as at Dec. 31, 2010. Nonetheless, the bank has a strong competitive position, which underpins its strong funding position. Customer deposits represent more than 90% of its funding base. Savings and current deposits, which are inherently low cost and stable, have been stable at about 50% of the bank's deposit base, leading to a
