The liabilities of HDFC Ltd will transfer to HDFC Bank upon their merger and there is no need to pay these dues on the very first day of the merger, the lender said on Thursday. The country’s largest private sector bank by balance sheet size is set to merge its parent mortgage lender Housing Development Finance Corporation Ltd (HDFC Ltd) into itself.
HDFC Bank said it has not approved any fundraising plan to pay these liabilities of HDFC Ltd. bank according to contractual maturity,” HDFC Bank said in a regulatory filing.
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The bank is not required to repay the amount of HDFC Ltd’s liability on the first day of the merger, unless coincidentally a particular liability falls due on the same date. HDFC Bank has already received approval in principle from the Reserve Bank (RBI) for the merger with HDFC Ltd, among other approvals.
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The parent-subsidiary merger is considered the biggest deal in Indian corporate history. In April this year, HDFC Bank and HDFC Ltd announced the merger proposal in which the lender will take over the mortgage lender for about $40 billion in about 18 months.
The information provided by the lender comes as a clarification in response to a news report, which said HDFC Bank is required to raise over Rs 2.2 trillion in order to repay HDFC Ltd’s liability when the merger between them comes into effect. . HDFC Bank said the report was factually incorrect and speculative. Shares of HDFC Bank traded at 1,427.65 rupees each on the BSE, down 0.38%.