‘We had two sleepless nights’: HDFC’s Deepak Parekh on HDFC Bank merger

HDFC-HDFC bank merger: Regulatory changes over the past three years have reduced barriers for merger, said HDFC Chairman Deepak Parekh.

After announcing the merger of HDFC Investments Limited and HDFC Holdings Limited with HDFC Bank Limited, Deepak Parekh said he has had “two sleepless nights” ahead of Monday’s mega news break.

The HDFC chairman added, "After 45 years of housing finance and 9 million homes provided to Indians, we had to find a home for ourselves. We have found it within our own family and in our own bank."

"Regulatory changes over the past three years have reduced barriers for merger," Deepak Parekh said, adding that the merger makes the mortgage offering of the combined entity even more competitive. The funding challenge will be minimised with the merger of the two entities, he said.

Speaking to reporters, the HDFC chairman said that post-merger, all the subsidiaries of HDFC will be owned by HDFC Bank, subject to regulatory approval. Parekh added that they have approached Reserve Bank of India (RBI) for a phased-in approach regarding SLR, CRR, PSL.

HDFC will acquire 41 percent stake in HDFC Bank through the transformational merger, according to an HDFC Bank filing with the stock exchanges.

Read more: HDFC-HDFC Bank Merger LIVE: After 45 years, we have found home in our own company, says Deepak Parekh

Commenting on the advantage the merger former SBI chairman Rajnish Kumar said in a CNBC TV18 interview that the cost of borrowing for HDFC Ltd will come down. "When the cost comes down the combined entity gains in terms of cost efficiencies and it is value accretive for both the shareholders of HDFC and HDFC Bank,” he said.