On July 1, the largest private bank in India and the mortgage industry, HDFC Bank, will combine to form a new company with a market value of ₹14.37 lakh crore. In a period of consistent expansion for the Indian economy, the merger will be advantageous to both shareholders and customers.
Deepak Parekh, the chairman of HDFC, and Keki Mistry, vice chairman of HDFC, announced on June 27 that the two businesses would hold separate board meetings on June 30, after business hours, which would be the final board meeting for HDFC Ltd. Following the merger, HDFC branches will remain open, however HDFC Bank will be shown on the signboards.
By combining their strengths, HDFC Bank and HDFC will become a stronger financial organisation. The objective is to better meet client needs and adjust to changes in the industry. Synergies between HDFC Bank’s banking system and its client base in housing finance will result from the merger.
The combination of banking services and housing finance options will probably result in the creation of novel goods and services catered to the requirements of homebuyers. This can include expedited procedures for home loan applicants, competitive interest rates, and specialised loan packages. The combined resources of HDFC Bank and HDFC could lead to improved client service, a wider selection of financial products, and easier access to banking services.
Notably, around 70% of HDFC Bank’s customers don’t have an account with the bank. In contrast, only 2% of HDFC Bank’s clients owned an HDFC product. This gives the combined company enormous potential for cross-selling its goods and services, enabling it to grow.
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Updated: 01 Jul 2023, 11:17 PM IST