The institutions will get a customised mobile application powered by the lender through which users will be able to pay donations, settle utility bills and make other payments.
The bank said there are over 30 lakh institutions, which is an addressable opportunity.
It can be noted that banks target any business opportunity that gives them what is termed as the 'float business', by giving them access to large amount of low-cost funds through a single tie-up like a corporate salary account relationship.
The institutions will be having either a savings, current or escrow account with the bank.
HDFC Bank Country Head (Government and Institutional Business) Smita Bhagat said it will give access to transaction fees also and added that through this, it is looking to grow its share in the institutional business.
She said institutions will be on-board within four weeks, and will have to pay for the app customisation, for hosting charges and also an annual maintenance fees.
The end users who download the app to transact will not have to pay any extra charges, she said.
The bank already serves many of those it is targeting under the new business and it was feedback from them which set it off working on the service a few months ago.
Bhagat did not spell out the bank's targets and also exuded confidence that recent events around difficulties in accessing the accounts online faced by users will not hurt it.
Allaying concerns on privacy, she made it clear that HDFC Bank will not have any access to data or the users in the app, which will carry the individual institution's name. AA HRS