HDFC’s Parekh expects regulatory response to merger to be fair, judicious

Deepak Parekh, chairman of Ltd, the largest mortgage financier of the country said he expects the regulator’s view on the proposed merger with HDFC Bank to be fair and judicious while asking the stakeholders to be patient.

In his address to the shareholders in the annual report, the patriarch said after 45 glorious years of providing homes to millions of customers, the time is right for to find a new home.

In April, the HDFC and announced a plan for an all-stock deal merger, for which all the regulatory approvals are expected in 15-18 months.

has requested the Reserve Bank of India for more time to meet several regulatory requirements like cash reserve ratio, statutory liquidity ratio and priority sector lending targets.

“At this juncture, we are awaiting regulatory guidance on the path forward. We remain respectful of all our regulators and are confident that the outcome will be judicious and fair at a systemic level,” Parekh said in the note to the shareholders of HDFC.

“My only ask of our stakeholders is for your patience as we navigate through the complexities of this transaction. More than ever before, we need your trust and support,” he said.

Parekh said that the optimum path to scale up housing finance is to be housed within a banking structure.

The pool of resources for lending will be significantly larger and at lower costs.

“From a regulatory perspective, it is prudent for all large providers of housing finance to operate on a level playing field, with the same rules. Globally too, the scale of mortgage assets is exponentially larger in banks compared to non-banking financial entities,” he said.

Commenting on the Indian housing finance market, he said, the country should be able to double its home loans to around $600 billion in the next five years.

“This would coincide with the period when India attains its much-aspirated goal of being a US$ 5 trillion economy. Despite the doubling of housing loans, India’s mortgage penetration would still remain low at an estimated 13% of GDP,” he said.

Parekh said in order to take India’s mortgage to GDP ratio to cross 20%, housing loans in India will have to grow exponentially for decades to come.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard,

Digital Editor

Source link

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button