Mega merger of HDFC Ltd and HDFC Bank will happen tomorrow, from home loan to FD customers will have these 5 effects
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A big change is going to happen in the financial world of India on Saturday 1st July. The merger of India’s two most valuable companies HDFC Bank and HDFC Ltd is going to be implemented from July 1. This deal is worth about 40 billion dollars. After the merger of HDFC Bank and HDSF Ltd will become the 5th most valuable bank in the world. By April 2023, HDFC Bank was at number 11 in the world by market cap. One question that has been arising since this announcement is what will happen to home loans after the merger.
HDFC customers will be affected
According to experts, the loans of HDFC Bank, the country’s largest private sector lender, will be largely unaffected. However, there may be changes for customers availing loans from HDFC. Explain that HDFC Limited is India’s largest private home loan lender. Post merger, the entire home loan portfolio of HDFC will be transferred to HDFC. If a customer wants to link the home loan to External Benchmark Lending Rates ie EBLR, then he will get this option. Being an NBFC company, HDFC customers do not get this facility. Now, if the Reserve Bank reduces the repo rate, then the EMI of the loan will also reduce.
What will be the effect on the shareholders
Announcing the merger dates, HDFC Group Chairman Deepak Parekh said that the boards of HDFC Bank and HDFC would meet after market hours on June 30 to approve the merger. According to Keki Mistry, Group Vice-Chairman and CEO, HDFC stock delisting will be effective from July 13, 2023. This means that on July 13, the shares of the group’s housing finance firm will be delisted from the stock exchange. Every shareholder of HDFC Limited will get 42 shares of HDFC Bank for every 25 shares held by him. Mega merger of HDFC Ltd and HDFC Bank will happen tomorrow, from home loan to FD customers will have these 5 effects
Branches will be merged
HDFC has around 550 branches across the country, while HDFC Bank has a total of 9000 branches. After the merger, HDFC customers can avail the facility by visiting any branch of the bank. This means that now they will get more facilities.
What will happen to old FD customers
Merger will not affect the customers of FD i.e. Fixed Deposit. The FD that is running is paid after it matures. Interest will continue to be paid by HDFC to them as per the old agreement. Customers will get the facility to withdraw money when the FD matures. If a customer wants to continue it, then the interest offer on HDFC Bank Fixed Deposit will also be available to new customers.Mega merger of HDFC Ltd and HDFC Bank will happen tomorrow, from home loan to FD customers will have these 5 effects
What are the FD rates
HDFC Limited is an NBFC. Usually FD gives more interest to the investors. In such a situation, the merger can cause loss here. HDFC Limited offers interest ranging from 6.56 per cent to 7.21 per cent on FDs of 12 to 120 months. On the other hand, if we talk about HDFC Bank, it gives interest ranging from 3% to 7.25% on fixed deposits ranging from 7 days to 10 years. However, HDFC Bank offers deposit insurance cover of up to Rs 5 lakh to its customers.Mega merger of HDFC Ltd and HDFC Bank will happen tomorrow, from home loan to FD customers will have these 5 effects
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