Mumbai:- The Reserve Bank of India(RBI) has made several changes over the last few years. Stipulation pf LCR requirements has been done and it has brought in scale-based regulations and harmonized-NPA norms.
Sashidhar Jagdishan, CEO of HDFC Bank said “This merger will be seamless dovetailing into the larger umbrella of the bank.” According to Parekh “We have approached the RBI to keep stake in HDFC life as it is; we currently hold 48% in the insurance venture. We can easily buy more stake from the market to bring it to 50%”.
RBI rules stipulate banks can hold either 30% or above 50% in insurance ventures. HDFC Chairman Deepak Parekh added that “The son grows and acquires the father’s business, that is all that is happening.” Parekh said “The Bank has requested RBI for a phased-in approach for SLR, CRR and PSL requirements. The RBI is considering the requests as per a letter dated April 1 to HDFC Bank.”
For grandfathering of some assets and liabilities and stake in subsidiaries the bank has also requested RBI. The merger is subject to the approval of the RBI, SEBI, shareholders and other authorities and mortgage lender HDFC early Monday announced that it will merge with HDFC Bank, with a share merger ratio of 42 shares of HDFC Bank to 25 shares of HDFC.
The bank said that the share exchange ratio for the amalgamation of HDFC with and into HDFC Bank will be 42 equity shares, credited as fully paid up, of the face value of Re 1 each of HDFC Bank for every 25 fully paid-up equity shares of the face value of Rs 2 of HDFC.
Published By: Apoorva Wakodikar
Edited By: Khushi Thakur