The Telegraph
Tuesday , July 22 , 2014
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Merger made easy

Mumbai, July 21: The recent guidelines announced by the RBI has relaxed the conditions for a merger between HDFC and HDFC Bank, deputy managing director of the private bank, Paresh Sukthankar, said today. However, no discussion has been held between the two entities with regard to such a possibility.

The RBI has recently relaxed the reserve requirements such as cash reserve ratio and statutory liquidity ratio for funds raised by banks to finance infrastructure and affordable housing sectors. These relaxations led to a view that it would remove a major impediment to the merger. Officials had said one of the obstacles was that the combined entity would have to incur a huge cost to maintain CRR or SLR requirements against the borrowings by the housing finance company.