HDFC and HDFC Bank Merge: All You Need To Know

HDFC and HDFC Bank Merge: All You Need To Know

India’s second-largest private sector lender, HDFC Bank and the country’s eighth-largest by assets HDFC Capital are merging to create a new entity. The new entity, to be called HDFC Bank, will have a combined loan book of over Rs. 3.8 lakh crore, making it the second-largest lender in the country by this metric. HDFC Bank and HDFC Capital are both wholly-owned subsidiaries of the HDFC Group, the country’s largest private sector lender. The merger will create a bank with a significantly larger balance sheet and a wider network, as well as economies of scale in areas such as technology, infrastructure and operations. The merged entity will have offices across the country, as well as overseas. Here’s all you need to know about the HDFC Bank-HDFC Capital merger.

Why is HDFC merging with HDFC Capital?

The two standalone banks will soon be a lot larger, with a combined balance sheet of over Rs. 3.8 lakh crore. However, the combined entity will have only around half a dozen branches each in India and the US. The merged entity will have offices across the country, as well as overseas. The rationale for the merger is to create a leading Indian bank with a broader branch network, a larger loan book, a more efficient and digital platform, and economies of scale in areas such as technology, infrastructure and operations.

What will become of the two standalone banks?

The newly merged entity will be known as HDFC Bank. The HDFC Bank brand will be used for all operations outside of India, including in the US, Japan and the European Union. The brand will continue to be used in India for the operations that will become part of HDFC Bank. The standalone banks will continue to operate as before, with no immediate changes to products or services.

Key Takeaway

HDFC Bank and HDFC Capital are both wholly-owned subsidiaries of the HDFC Group, the country’s largest private sector lender. The merger will create a bank with a significantly larger balance sheet and a wider network, as well as economies of scale in areas such as technology, infrastructure and operations. The merged entity will have offices across the country, as well as overseas. Here’s all you need to know about the HDFC Bank-HDFC Capital merger.