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    Reserve bank clears decks for HDFC twins' merger

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    Reserve bank clears decks for HDFC twins' merger

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    In a letter to the stock exchanges, HDFC Bank said the RBI has issued a no-objection certificate for its merger with HDFC Limitd, and also for the merger of HDFC Limited with its wholly owned subsidiaries, HDFC Investments Limited and HDFC Holdings Limited. 

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    HDFC Bank on Monday said the Reserve Bank of India has issued a no-objection certificate with respect to its amalgamation with HDFC Limited.
    In a letter to the stock exchanges, the bank further said that the RBI has also approved the merger of HDFC Limited with its wholly owned subsidiaries, HDFC Investments Limited and HDFC Holdings Limited.
    "The scheme remains subject to various statutory and regulatory approvals inter alia including approvals from the Competition Commission of India, the National Company Law Tribunal, other applicable authorities and the respective shareholders and creditors of the companies involved in the Scheme, as may be required," HDFC Bank said in the letter.
    On Saturday, both stock exchanges — National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) — issued "no adverse observations" and "no objection" to the amalgamation scheme.
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    The observation letters, dated July 2, 2022, are valid for six months, within which the 'scheme' is to be submitted to the National Company Law Tribunal (NCLT).
    On April 4, the boards of both HDFC and HDFC Bank approved a scheme of amalgamation, subject to requisite approvals.
    In April, HDFC Bank’s Managing Director and CEO Sashidhar Jagdishan had said, "The micro-enterprises business is firing from all sides. So the ability for us to organically get the priority sector assets is much better than what it was six years ago. In addition to that, if this merger does get approved and gets consummated, we can sort of unleash the affordable housing product from our 50 percent strong distribution."
    On liquidity, he had said, “I think both institutions have enough accesses, which could qualify for that. Nevertheless, of course, this is just at a point in time, over the next 18 months, assuming that is the time period, which will take for the regulatory approvals to come through, both institutions will be growing, so the requirement could be larger."
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