Shareholders of HDFC have approved the merger of the housing finance company with its banking arm in an extraordinary general meeting (EGM). Over 99.9% of the votes were polled in favour of the merger. Addressing shareholders in the EGM, HDFC chairman Deepak Parekh said that HDFC Bank has written to the RBI for forbearance in respect of investment in all subsidiaries.
“Discussions are currently on with RBI and we are awaiting the final response,” said Parekh. He added that all investments, including shares in Yes Bank and Bandhan Bank, will be held by HDFC Bank.
“All employees of HDFC will be transferred to HDFC Bank on terms not less favourable. Those over 60 will retire” said Parekh. He added that he would not be part of the board of the bank as the maximum age limit for bank directors was 75 years. Also, agents of HDFC are proposed to be hired by the bank subject to regulatory approval.
“The merged entity is expected to have sufficient liquidity and alternatives to meet the regulatory requirements. Even if RBI does not grant forbearance on priority sector, the targets will not be immediately applicable and HDFC Bank will have 12 months to meet the target in terms of the priority sector norms” said Parekh.
He said that all the existing deposits of HDFC will continue to have the same terms and conditions including date of maturity. “From a regulatory perspective, we anticipate the merger to be effective by June 2023,” said Parekh.
