New DelhiThe mega-merger of HDFC Bank and its parent company Housing and Development Finance Corporation (HDFC) was one of the biggest news in the banking sector recently. The merger has made HDFC the fourth largest bank in the world and has brought back the spotlight on Hasmukh Thakordas Parekh – the man who pioneered housing finance in India and founded the Housing Development Finance Corporation in 1977. HDFC – the brainchild of Hasmukh Thakordas Parekh – has come a long way since its inception in 1977, overcoming many hurdles in its evolution from a budding start-up to India’s leading provider of housing finance. For his invaluable contribution to the housing finance industry and banking sector in India, Parekh was awarded the Padma Bhushan by the Government of India in 1992. He was also awarded an Honorary Fellowship by the London School of Economics.
Inspirational story of Hasmukh Thakordas Parekh
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Hasmukh Thakordas Parekh was born on 10 March 1911 in Surat, Gujarat, into a banking family. He inherited Gujarati business acumen from his father. However, he was heavily influenced by his mother. Growing up with his family in a chawl in Mumbai, Parekh worked a few part-time jobs and earned a bachelor’s degree in economics from the University of Mumbai. Later he went to London School of Economics from where he did B.Sc. studied. Degree in Banking and Finance.
After returning to India in 1936, Parekh began his financial career with Harkisandas Lukhmidas, a leading stock broking firm. Along with this, he also worked as a lecturer in economics at St. Xavier’s College, Mumbai for about three years. He later revealed how his two-decade-long stint at the broking firm shaped his career and taught him the most basic lessons in business.
First sting with ICICI
His first big break came in 1956 when he joined ICICI as Deputy General Manager and became the Chairman and Managing Director in 1972. He retired in 1976 and remained the Chairman of the Board of ICICI till 1978.
Establishment of HDFC
Parekh, who wanted middle-class Indians to have a chance to own a house before they grew old, founded Housing Development Finance Corporation Limited (HDFC), India’s first retail housing finance company, in 1977 at the age of 65. This happened soon after he retired as the chairman of the Industrial Credit and Investment Corporation of India (ICICI).
He founded HDFC – India’s first retail housing finance company – without any financial support from the Government of India. Under Parekh’s dynamic leadership and direction, HDFC grew manifold, while remaining 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 is only possible with a group of dedicated professionals who share a common goal to serve and are prepared to take appropriate risks.
From disbursing the first home loan in 1978, HDFC was sanctioning annual loans of over 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 the people came true with an organization that was crafted by its international peers but was Indian at heart.
In 1983, he promoted the Hindustan Oil Exploration Company Limited (HOEC), the first private sector oil exploration company in India. He also established the 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 about 16 years.
Padma Bhushan
In recognition of his achievements, the Government of India honored Parekh with the Padma Bhushan in 1992. Parekh died on November 18, 1994, marking the end of an era for HDFC as well as the Indian financial world. The merger of HDFC, the parent housing finance company, and its offspring has created a banking giant, a financial superpower with a market capitalization of Rs 14 lakh crore, making HDFC Bank the fourth largest bank in the world.