When ICICI Bank wanted to acquire HDFC Ltd

ICICI Bank had offered to take over mortgage lender HDFC Ltd before its reverse merger with HDFC Bank, says former HDFC chairman Deepak Parekh

New Delhi: Veteran banker and former chairman of HDFC Ltd Deepak Parekh has said that ICICI Bank had made an offer to take over mortgage lender HDFC Ltd but it was declined.

HDFC Ltd, the parent entity of HDFC Bank, later merged with its banking subsidiary to create the country’s biggest private sector lender. The merger became effective from July 1, 2023. With the reverse merger, the 44-year-old institution HDFC Ltd faded into memory lane.

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Interestingly, creation of HDFC Ltd was financially supported by erstwhile ICICI Ltd, the parent entity of ICICI Bank.

During an interaction with ex-ICICI Bank MD and CEO Chanda Kochhar, released on YouTube, Parekh said, “I remember you talking to me once…you said that ICICI started HDFC. ‘Why don’t you come back home?’ That was your offer.”

However, Parekh said he declined the offer, saying “it won’t be fair or proper with our name and the bank and all.”

Later eventual reverse merger with HDFC Bank, completed in July 2023, was driven mainly by regulatory pressure, he said, adding, “The RBI supported us and they pushed us into it to some extent and they helped us…there were no concessions, no relief, no time, nothing but they helped us go through the process and get the approval.”

Describing the merger as good for the institution, he said, it is good for the country to have large banks. Indian banks must grow through acquisitions to become stronger in future, he added.