Connect with us

Analysis

What will be HDFC merger’s effect on the customers

Published

on

To form a financial services behemoth, India’s largest private lender HDFC Bank will combine with HDFC Ltd, the country’s largest home financing provider. Today we will describe about HDFC merger’s effect on the customers.

Benefits from this one-of-a-kind combination might be in both directions. Firstly, funding costs are anticipated to fall, which may be passed on to mortgage customers, further solidifying the company’s position in the market. Secondly, the company will also benefit from increased efficiency as a result of activity streamlining and cost rationalization.

Some experts, however, are concerned that the Reserve Bank of India’s statutory liquidity ratio, cash reserve ratio, and priority sector lending requirements may have an immediate impact on the merged entity’s profitability. According to a study by Macquarie Capital Securities, HDFC Bank will need Rs. 70,000 to Rs. 80,000 crores to meet SLR/CRR requirements, and Rs. 90,000 crore to meet priority sector standards.

HDFC Ltd shareholders would receive 42 shares of the bank in exchange for their 25 shares. The existing shareholders will own 41% of HDFC Bank. HDFC Bank will become a fully public corporation after the home finance business’s shares in the lender are cancelled.

The merger of India’s largest housing finance company, HDFC Limited, with HDFC Bank will enable seamless delivery of house loans to its client base of over 68 million. This will improve the speed of credit development in the economy, according to HDFC Bank.  HDFC Ltd and HDFC Bank will continue to function as distinct organizations until the merger comes into effect, which is expected to take 12-18 months.

“Post the combination, HDFC Bank’s customers will be offered mortgages as a core product in a seamless manner. HDFC Bank will also leverage the long tenor mortgage relationship to offer varied credit and deposit products enabled through better insights throughout the customer life-cycle,” said a statement issued by the bank.

The merger is said to be an outcome of the larger trend of consolidations in the financial industry. The first phase of public-sector bank consolidation has already occurred, prompted in part by the need to strengthen balance sheets. Citibank’s consumer division in India was recently bought by Axis Bank.

“The resulting larger balance sheet would allow underwriting of large ticket infrastructure loans, accelerate the pace of credit growth in the economy, boost affordable housing and increase the quantum of credit to the priority sector, including credit to the agriculture sector,” said Deepak Parekh, Chairman HDFC Limited.

Read more brand NewsStories, and market analysis on various industries from automobiles to fashion at Brandz Watch | Follow us on Twitter & Youtube

Continue Reading
Click to comment
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments
Zomato Faces Backlash Over New Pure Veg Fleet: Embraces 'Red Reality'
Analysis2 days ago

Zomato Faces Backlash Over New Pure Veg Fleet: Embraces ‘Red Reality’

Apple Google AI Deal: 21st Century Tech Collab to Integrate Gemini-Like Features in iOS
Analysis2 days ago

Apple Google AI Deal: 21st Century Tech Collab to Integrate Gemini-Like Features in iOS
With this deal, Google will be able to tap into Apple’s 1.4 billion active user base worldwide and expand the reach of its AI, Gemini, to a new stratum of users.

The 'Paramount' Sale of Viacom18's 13.01% Stake to Reliance Establishes Mukesh Ambani as Asia's Media Mogul
Analysis2 weeks ago

The ‘Paramount’ Sale of Viacom18’s 13.01% Stake to Reliance Establishes Mukesh Ambani as Asia’s Media Mogul
Paramount Global has been aiming to improve its balance sheet after ending last financial year with a long-standing debt of $15 billion.

Adani-Qualcomm Meeting Sends Sparks Across the Indian Tech Ecosystem
Latest2 weeks ago

Adani-Qualcomm Meeting Sends Sparks Across the Indian Tech Ecosystem

91Club offers a unique blend of entertainment and monetary rewards, making it a preferred choice for 2 million players.
Latest3 weeks ago

91Club: The Gaming Platform To Earn Real Money
Play and Win: 91Club, Where Gaming Means Real Money

Daman Game is a platform offering many games designed to entertain players of all ages It offers you a chance to win money by playing games.
Latest3 weeks ago

Daman Game: Where Fun Meets Real Rewards
Game On with Daman: Where Entertainment Pays Off!

TATA's Tech Revolution: Venturing into Chipmaking
Analysis4 weeks ago

TATA’s Tech Revolution: Venturing into Chipmaking
TATA Prepares to Venture into Chipmaking Business: Becoming the Herald of Change and Development in the Indian Tech Ecosystem

BharatGPT’s Hanooman: Desi Artificial Intelligence Ready For March Public Launch
Latest4 weeks ago

BharatGPT’s Hanooman: Desi Artificial Intelligence Ready For March Public Launch
The Indian tech scene is about to witness a dramatic makeover as BharaGPT prepares the public launch of the ‘Made In India’ AI, Hanooman.

OpenAI Launches SORA, its Text-to-Video Generator Model
Latest1 month ago

OpenAI Launches SORA, its Text-to-Video Generator Model

Gully Labs Story
Latest2 months ago

How a Homegrown Indian Sneaker Brand, Gully Labs is Embracing Indianism
Gully Labs: Redefining the sneaker culture in India

Topics

Editor's Pick

0
Would love your thoughts, please comment.x
()
x