Press Release March 28, 2008 CARE UPGRADES THE RATING OF SUBORDINATE TIER II BONDS OF ERSTWHILE LORD KRISHNA BANK LTD., NOW MERGED WITH CENTURION BANK OF PUNJAB LTD.

CARE had earlier placed the CARE BBB+ (Triple B Plus) rating assigned to the outstanding Subordinated Tier II Bond Issues of Lord Krishna Bank Ltd (LKB) aggregating to Rs.50.7 crore under “credit watch” with developing implications following the announcement of merger of erstwhile LKB with Centurion Bank of Punjab Ltd. Subsequently, pursuant to the amalgamation of erstwhile Lord Krishna Bank Ltd (LKB) with Centurion Bank of Punjab Ltd, the aforesaid Subordinate Tier II bonds were transferred to Centurion Bank of Punjab Ltd from erstwhile LKB. After a review of the performance of Centurion Bank of Punjab Ltd, impact of amalgamation on the financials of Centurion Bank of Punjab Ltd. and other recent developments, CARE has upgraded the existing rating assigned to the aforesaid Subordinate Tier II bonds aggregating to Rs.50.7 crore from ‘CARE BBB+’ [Triple B Plus] to ‘CARE A’ [Single A]. However, in light of the recent announcement of proposed merger of Centurion Bank of Punjab Ltd (CBoP) with HDFC Bank Ltd., it has been decided to place the ‘CARE A’ [Single A] rating assigned to the above mentioned bond issue under credit watch with positive implications. Instruments with this rating are considered to offer adequate safety for timely servicing of debt obligations. Such instruments carry low credit risk. The rating factors in CBoP’s experienced and proactive management, proven track record of raising capital, its healthy Tier I capital position, comfortable spreads and good technology infrastructure. CBoP’s relatively low operating efficiencies, its relatively small size of operations characterized by regional orientation, moderate asset quality and increasing reliance on high cost funds on account of reducing proportion of low cost deposit base are the key rating sensitivities. CBoP is a new age private sector bank with a relatively small asset base and regional orientation of business (mostly Punjab & Haryana, Maharashtra, Kerala). The bank has mainly grown through the inorganic route. The bank amalgamated Bank of Punjab with itself with effect from October 1, 2005 followed by Lord Krishna Bank in August 2007. The Bank’s business model focuses primarily on the Retail and SME segment. Retail and SME Advances accounted for around 69% [December 31, 2007: 60%] and 14% [December 31, 2007: 18.6%] of the total Advances respectively as on March 31, 2007. Net NPA to Net Advances stood at 1.69% as on December 31, 2007 [March 31, 2007: 1.26%]. The Bank has a relatively small deposit base, partially on account of its small size and regional presence. Merger with Bank of Punjab in FY06 helped the Bank to improve its retail deposit base. The Bank has a proven track record of raising capital periodically to support its growing operations. The Bank raised Rs.318 crore through preferential allotment in FY07 followed by Rs.500 crore through QIP route in September 2007. Capital Adequacy Ratio stood at 11.51% as on December 31, 2007. On February 23, 2008, the Board of Directors of HDFC Bank Ltd. (HBL) and Centurion Bank of Punjab (CBoP) at their respective meetings approved the in-principle merger of CBoP with HDFC Bank subject to the approval of the shareholders of both the banks, approval of the Reserve Bank of India and other approvals as may be required. CBoP shareholders will get one HDFC Bank share for every 29 shares they hold as per the swap ratio approved by the boards of respective banks. Analyst Contact Rajesh Mokashi Tel # (022) 6754 3636 Mobile # 982 0416 001 Email:[email protected] Dislaimer CARE’s ratings are opinions on credit quality and are not recommendations to buy, sell or hold any security. CARE has based its ratings on information obtained from sources believed by it to be accurate and reliable. CARE does not, however, guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. Most issuers of securities rated by CARE have paid a credit rating fee, based on the amount and type of securities issued.

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