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The optimum path to scale up housing finance is to be housed within a banking structure, HDFC Chairman Deepak Parekh has said.
In his message in the annual report 2021-22 of HDFC , Parekh has spoken on the proposed merger of HDFC with HDFC Bank.
Pool of resources
“The pool of resources for lending will be significantly larger and at lower costs,” he said, adding that 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 further said.
Regulatory clearance is awaited for the proposed merger, Parekh said, adding that they remain respectful of all regulators and are confident that the outcome will be judicious and fair at a systemic level.
“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,” Parekh further said.
The boards of the two companies has on April 4 this year approved the transaction, which Parekh termed as a merger of two equals.
There is also natural affinity between HDFC Bank and HDFC and both both entities stand strongly committed to enhanced environmental, social and governance (ESG) disclosures.
“Financial and human capital is critical through a merger process, as is a lucid communication strategy on key developments during this period,” Parekh said.
“It remains our every endeavour to be available and accessible to all our stakeholders to assuage concerns in an open and transparent manner,” he underlined.
The annual general meeting of HDFCis scheduled for June 30.
The business for the AGM includes a Special Resolution for re-appointment of Deepak Parekh, as a Non-Executive Director and re-appointment of Renu Sud Karnad as the Managing Director of HDFC.
Expressing confidence about the growth in home loans, Parekh said India should be able to double its home loans to around $ 600 billion within the next five years.
“This would coincide with the period when India attains its much-aspired goal of being a $5 trillion economy,” he noted.
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