On 4th July 2022 HDFC Bank received no objection letter from Reserve Bank of India (RBI) merging HDFC (Housing Development finance Corporation) Ltd and HDFC Bank. BSE Limited and NSE (National Stock Exchange) have also issued observation letters for the proposed merger.
- The approval from various statutory and regulatory authorities are still pending, including approvals from the Competition Commission of India (CCI), the National Company Law Tribunal (NCLT) and the respective shareholders and creditors of the companies that are involved in the Scheme.
Background:
i.On 4th April 2022, the board of HDFC Bank agreed to take over HDFC with a deal value of around USD 40 billion, subject to approvals.
ii.After amalgamation, The proposed entity would have a combined asset base of around Rs 18 lakh crore and will complete the merging by the 2nd or 3rd quarter of FY24, subject to approvals.
iii.The merger would be the largest in Indian corporate history, the new HDFC entity with a $169-billion market capitalisation (the second-largest in India) and will be among the 10 most valued banks in the world and it will be twice the size of ICICI Bank, the second largest private bank in the country.
Shares after amalgamation:
i.Once the deal is effective, HDFC Bank will be 100 percent owned by public shareholders, and existing shareholders of HDFC will own 41 percent of the bank.
- Every HDFC shareholder will get 42 shares of HDFC Bank for every 25 shares held.
Note – HDFC Investments and HDFC Holdings boards have also approved the merger of their respective companies into HDFC Limited.
RBI’s DICGC Pays Eligible Depositors of two Co-operative Banks
Reserve Bank of India’s (RBIs), Deposit Insurance and Credit Guarantee Corporation (DICGC) will pay the eligible depositors of 2 Maharashtra based banks that includes, Shankarrao Pujari Nutan Sahakari Bank, Ichalkaranji, and Harihareshwar Sahakari Bank, Wai in August 2022.
Key Highlights:
i.Depositors of the Shankarrao Pujari Nutan Sahakari Bank will get the amount credited to the aadhaar linked alternate bank account specified by them on 10th August 2022 and those of Harihareshwar Sahakari Bank on 28th August 2022.
ii.RBI has imposed several restrictions, including on withdrawals by depositors.
About DICGC:
i.DICGC is a wholly-owned subsidiary of the Reserve Bank of India (RBI) which provides an insurance cover of up to Rs 5 lakh on bank deposits.
ii.DICGC’s Deposit insurance covers all commercial banks, including local area banks and regional rural banks as well as co-operative banks in all the states and Union Territories.
- DICGC settled aggregate claims of Rs 8,516.6 crore under different channels during 2021-22.
iii.Under the 2021 Deposit Insurance and Credit Guarantee Corporation (Amendment) Act, the Corporation is liable to pay the insured deposit amount to depositors of an insured bank when that bank undergoes liquidation, reconstruction or any other arrangement under a scheme, and merger or acquisition by another bank.
Chairman – Michael Debabrata Patra(M.D.Patra)
Establishment – 15th July 1978
Headquarters – Mumbai, Maharashtra
