According to the exchange filing, India’s largest mortgage lender has agreed to merge its low-cost arm Gruh Finance Pvt. Ltd. with Bandhan Bank, can hold 9.9 percent in the bank. RBI hadn’t allowed owning more than 9.9 percent to HDFC in Bandhan Bank, that’s the maximum a non-banking finance company can own in a private bank, however, HDFC had sought approval for 14.96 percent.
HDFC agreed to merge Gruh Finance with the microlender-turned-universal bank in a share-swap deal. Shareholders of Gruh Finance will get 568 shares of Bandhan Bank for every 1,000 held. HDFC owns 57.83 percent in Gruh Finance.
When the collab was announced, Bandhan bank said that the deal was a part of a broader plan to diversify its loan book.
Chandra Shekhar Ghosh, managing director, and chief executive officer at Bandhan Bank, had said, “ The merger with Gruh Finance would bring down loans to the unsecured segment from 86 percent to 50 percent of total advances.”