HDFC Bank-HDFC merger update: Private sector bank says no need to pay off parent firm's liabilities
HDFC Bank has already received in-principle approval from the Reserve Bank (RBI) for the merger with HDFC Ltd, among other approvals.
Liabilities of HDFC Ltd will be transferred to HDFC Bank upon their merger and there is no need to pay off such dues on the very first day of the merger, the lender said on Thursday. The country's largest private sector bank by balance sheet size is set to merge its parent mortgage lender Housing Development Finance Corporation Ltd (HDFC Ltd) with itself. HDFC Bank said it has not approved any plans to raise funds to pay towards such liabilities of HDFC Ltd.
"As per the proposed composite scheme of amalgamation, the liabilities of HDFC Limited will be transferred to the bank and will be serviced and repaid by the bank as per the contracted maturity," HDFC Bank said in a regulatory filing.
The bank is not required to pay off any amount of liability of HDFC Ltd on day one of the merger unless coincidentally any particular liability happens to mature on the same date.
HDFC Bank has already received in-principle approval from the Reserve Bank (RBI) for the merger with HDFC Ltd, among other approvals.
The parent-subsidiary merger is seen as the biggest transaction in India's corporate history.
In April this year, HDFC Bank and HDFC Ltd announced the merger proposal in which the lender will take over the mortgage lender for about USD 40 billion in about 18 months.
The information provided by the lender comes as a clarification in response to a news report, which stated that HDFC Bank is required to raise over Rs 2.2 trillion in order to pay off HDFC Ltd's liability when the merger between them comes to effect.
HDFC Bank said the news report is factually incorrect and speculative.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Retirement Planning: SIP+SWP combination; Rs 15,000 monthly SIP for 25 years and then Rs 1,52,000 monthly income for 30 years
Top Gold ETF vs Top Large Cap Mutual Fund 10-year Return Calculator: Which has given higher return on Rs 11 lakh investment; see calculations
Retirement Calculator: 40 years of age, Rs 50,000 monthly expenses; what should be retirement corpus and monthly investment
SBI 444-day FD vs Union Bank of India 333-day FD: Know maturity amount on Rs 4 lakh and Rs 8 lakh investments for general and senior citizens
EPF vs SIP vs PPF Calculator: Rs 12,000 monthly investment for 30 years; which can create highest retirement corpus
Home loan EMI vs Mutual Fund SIP Calculator: Rs 70 lakh home loan EMI for 20 years or SIP equal to EMI for 10 years; which can be easier route to buy home; know maths
05:03 PM IST