MUMBAI: HDFC chairman Deepak Parekh on Monday mentioned harmonisation of guidelines between banks and non-banks which reduces the regulatory arbitrage was one of many key components which influenced the choice for merger between the most important dwelling financier and HDFC Financial institution. Parekh, who mentioned the merger discussions have occurred over the past three weeks, famous that necessities like non performing asset recognition being at par and size-based laws for non-bank finance corporations are among the many modifications in panorama.
Addressing a press convention after the shock announcement earlier within the day, Parekh mentioned the final three years have seen harmonisation within the laws which cut back the "regulatory arbitrage" of working a separate dwelling finance firm.
He mentioned being an housing finance firm, HDFC doesn't have precedence sector loans mandate, and isn't required to adjust to statutory liquidity ratio or money reserve ratio mandates for its liabilities.
Subsequently, an utility for some leeway, the place the RBI can grant time for these elements of the belongings and liabilities to match up has been made to the central financial institution, he mentioned.
Parekh mentioned he's assured that the regulators will approve the merger scheme introduced earlier within the day.
Terming the merger as certainly one of equals, he mentioned the amalgamation will take between 12-18 months and added that it's going to not influence staff of HDFC, which is ready to be merged into HDFC Financial institution.
The mixed stability sheet of the merged entity can be Rs 17.87 lakh crore and the online price can be Rs 3.3 lakh crore, Parekh mentioned.