HDFC Bank Ltd is likely to raise at least Rs 2.2 trillion from public deposits and corporate bonds, and an additional Rs 50,000 crore to meet capital requirements and other pre-requisites specified by the regulator for its merger with India’s largest mortgage lender and parent Housing Development Finance Corp. Ltd.
HDFC Ltd is a non-banking entity that had borrowed from other lenders, will have to repay its debt for the merger to materialise since Indian banks cannot show loans from other banks on their balance sheet.
In April, HDFC Bank and HDFC announced the $40 billion merger, acclaimed as the largest such transaction in corporate history. After the merger, HDFC Bank will be twice the size of ICICI Bank, which is the third-largest lender now.
HDFC has asked RBI to waive off the SLR requirement for now and comply with it in a phased manner. Banks need to maintain 18 percent SLR and 25 percent SLR as of the last Friday of the second fortnight of a month, according to the Banking Regulation Act, 1949.