Moody\'s Investors Service today upgraded the local
currency deposit ratings of HDFC Bank (India) to A3/Prime-1 from
Baa1/Prime-2. Moody\'s also affirmed the bank\'s financial strength rating
(\"BFSR\") of C- and assigned Baa2 foreign currency long-term ratings to
notes to be issued under HDFC Bank\'s US$1 billion Medium Term Note
(\"MTN\") programme. The outlook on all ratings is stable.

\"The upgrade of HDFC Bank\'s local currency deposit ratings is underpinned
by the significant growth in the bank\'s balance sheet in recent years,
with an increased market share in terms of assets, deposits and advances,
and its growing systemic importance in the Indian banking community,\"
says Peter Carvalho, Vice President-Senior Analyst at Moody\'s Middle East
Office in Dubai and lead analyst for HDFC Bank.

Moody\'s affirmation of HDFC Bank\'s BFSR of C- -- which maps to a baseline
credit assessment of Baa2 -- is in the context of the proposed merger
with Centurion Bank of Punjab, which the rating agency will continue to
monitor closely. \"Moody\'s expects that the merger will enable the bank to
realise economies of scale and to expand its network and reach, with the
addition of close to 400 branches. However, the challenge for HDFC Bank
will be to integrate the business and cultures of the entities -- HDFC
Bank with its merger partner Centurion Bank of Punjab/Lord Krishna Bank
-- into a single cohesive unit,\" Mr Carvalho adds.

Moody\'s has also assigned Baa2 long-term ratings to the foreign currency
senior unsecured notes, the subordinated and junior subordinated notes
and the perpetual non-cumulative notes to be issued by HDFC Bank under
its US$1 billion MTN programme.

The latter two hybrid securities (junior subordinated notes and perpetual
non-cumulative notes) to be issued under the programme bear the
characteristics specified in the Reserve Bank of India\'s (RBI) new
guidelines on debt capital instruments and will be considered by the RBI
to be Upper Tier II and Hybrid Tier I instruments, respectively.

Any senior and subordinated notes to be issued under the MTN programme
will be rated Baa2, being constrained by the foreign currency debt
ceiling for India (Baa2). Such instruments would normally have been
rated higher were it not for transfer risk. The Baa2 rating on the
perpetual non-cumulative notes (Hybrid Tier I) reflects the more junior
ranking of this instrument, and is unconstrained.

All ratings incorporate HDFC Bank\'s standalone financial strength, which
is represented by the C- BFSR and is supported by its healthy financial
profile, well-established commercial banking franchise, moderate risk
appetite and competent risk management. They also take into account the
fact that the bank\'s rapidly growing retail asset portfolio has not yet
been tested under adverse economic conditions as well as the competitive
and challenging environment in India.

The debt and deposit ratings additionally incorporate Moody\'s assessment
of a high likelihood of support for HDFC Bank from the Government of
India in the event of need.

HDFC Bank is headquartered in Mumbai, and at the end of December 2007 had total assets of INR1,314.39 billion (US$33.35 billion).