NHB gives no objection to HDFC-HDFC Bank merger

The entities are yet to receive approval from the Competition Commission of India (CCI) and the National Company Law Tribunal (NCLT) for the merger.

HDFC merger news
The proposed merger has received no objection from the RBI, the stock exchanges and Sebi.

Housing Development Finance Corporation (HDFC) on Tuesday said that it has received no objection from the National Housing Board (NHB) to the proposed merger of the company along with two other entities with HDFC Bank.

Also Read | HDFC raises retail prime lending rate on home loans by 25 bps, HDFC Bank hikes MCLR

“The NHB vide its letter dated August 8 has granted its no-objection to the Scheme, as required pursuant to the refinance facilities availed by HDFC from NHB,” the company said in an exchange filing.

HDFC in FY22 availed refinance to the tune of Rs 3,425 crore from NHB under various refinance schemes such as special refinance facility, regular refinance scheme and promoting green housing refinance scheme, as per information in its annual report.

The proposed merger has received no objection from the Reserve Bank of India (RBI), the stock exchanges and the Securities and Exchange Board of India (Sebi). The entities are yet to receive approval from the Competition Commission of India (CCI) and the National Company Law Tribunal (NCLT) for the merger.

The scheme includes the merger of HDFC into HDFC Bank after two other group entities HDFC Investments and HDFC Holdings are merged into HDFC.

Post the merger, HDFC Bank’s customers will be offered mortgages as a core product while HDFC Bank will leverage the long tenor mortgage relationship to offer credit and deposit products. The merger became possible because of higher regulatory standards for the non-banking financial companies (NBFCs) and a reduction in statutory liquidity ratio (SLR) rates.

Also Read | HDFC files application with NCLT for merger of HDFC Investments, HDFC Holdings with HDFC Bank

Out of 7.1 crore HDFC Bank customers, only 2% had availed of HDFC home loans while of the total HDFC customers, 70% of HDFC’s customers are not banking with HDFC Bank, which presents an opportunity, ICICI Securities said in a report earlier.

Atanu Chakraborty, chairman of HDFC Bank, had earlier said that the board of directors of the bank is closely monitoring the merger proposal for approval of various aspects of the merger various aspects of the progress made in getting regulatory approvals.

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