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economy | IST

RBI's variable reverse repo rate move a great first step: HSBC India

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Reserve Bank of India (RBI) concluded a 3-day variable rate reverse repo (VRRR) auction. To understand how the banking sector views it and also to gain a better sense of the recently announced L&T MF acquisition deal, CNBC-TV18's Latha Venkatesh spoke to Hitendra Dave, CEO of HSBC India.

Reserve Bank of India (RBI) concluded a 3-day variable rate reverse repo (VRRR) auction. A reverse repo is a rate at which RBI takes money from banks. A part of it is done at a fixed rate and some of it is a variable rate. To understand how the banking sector views it and also to gain a better sense of the recently announced L&T MF acquisition deal, CNBC-TV18's Latha Venkatesh spoke to Hitendra Dave, CEO of HSBC India.
Dave believes the variable reverse repo rate to be a great first step from RBI. He said, “This VRRR is a great first step, which RBI has done ensuring.”
Foreign lender HSBC, on Thursday, announced that its asset management arm will acquire L&T Mutual Fund for $425 million (about Rs 3,192 crore). L&T Finance Holdings (LTFH) and HSBC Asset Management (HSBC AMC) have entered into a definitive agreement whereby the latter will acquire 100 percent equity shares of L&T Investment Management.
Dave said that the transaction for the L&T MF business has been done at a very fair price, and it should be seen as a strong statement of commitment from HSBC to India. He said, “We are a strategic entrant. We intend to look after the customers forever, we want to look after the staff forever, we want to look after the other stakeholders forever and this valuation has been agreed between two parties with the help of many advisors on both sides.”
He mentioned that HSBC India is already the largest foreign bank in the country. He said, “HSBC, even though it’s a brand I represent, it stands for trust. The L&T Investment Management team has great research, investment, product manufacturing, distribution capabilities and when you combine HSBC’s Asia wealth interest, HSBC’s India ambition, HSBC India is already the largest foreign bank in the country and this compliments all of that.”
For the entire interview, watch the video