RBI gives selective regulatory relief to HDFC Bank post merger
Mumbai, April 21
In a mixed bag for HDFC Bank ahead of the parent HDFC’s merger with itself, the Reserve Bank of India has declined to make exceptions on certain aspects, and has offered some leeway on others.
The country’s largest private sector lender, which is aiming to conclude the merger with the home finance major by July, had written to the central bank seeking certain forbearances after announcing the USD 40-billion merger in April last year.
In an exchange filing this evening, HDFC Bank said it received a response from RBI on Thursday and also said that there are a few pending issues.
The RBI has refused to make any exceptions on cash reserve ratio (CRR) and statutory liquidity ratio (SLR) requirements as sought by HDFC Bank, while it has allowed some leeway on the priority sector lending (PSL) and investments front.
HDFC Bank shall continue to comply with extant requirements of CRR, SLR and LCR (liquidity coverage ratio) from the effective date of merger without exceptions, the lender said, quoting from the RBI letter. CRR is the percentage of deposits which a commercial bank like HDFC Bank has to park with the central bank for which it does not earn any interest.
