HDFC-HDFC Bank merger: Here’s what HDFC Chairman Deepak Parekh said

HDFC Chairman termed the move as a merger of equals and said that the housing finance business is poised to grow in leaps and bounds due to the implementation of RERA, infrastructure status to the housing sector, and government initiatives like affordable housing for all, amongst others.

Here’s what Deepak Parekh said:

• HDFC will merge into HDFC Bank, there will be no promoter in HDFC Bank now and all shares will be held by public

• The merger will not only strengthen the entity against competitors but will also make its mortgage offering competitive

• The merger will benefit the lower cost of fund to be available to the mortgage business

• Larger balance sheet and capital base will enable larger ticket loans including infrastructure loans that is the urgent requirement of the country

• RBI regulations say that anyone above 75 can’t be on the board of a bank and so I can’t be on the board of the bank. Keki Mistry will be a Director for a year or so and could handle the mortgage business

• Combined balance sheet of merged entity will be Rs 17.87 lakh crore, net worth to be Rs 3.3 lakh crore

• Regulatory arbitrage between running a bank and NBFCs has reduced; last 3 years have seen harmonisation of regulations

• The HDFC-HDFC Bank merger will not impact employees of HDFC Ltd