HDFC Bank well positioned to meet reserve ratio requirements post-merger

19 Apr 2023 , 09:28 AM

According to a Reuters report, even as it waits for the central bank to give its final opinion on petitions for forbearance, HDFC Bank Ltd, India’s largest private lender, is well-positioned to meet reserve ratio requirements following its merger with parent HDFC Ltd.

In a conference call on Saturday, Srinivasan Vaidyanathan, the chief financial officer of HDFC Bank, informed analysts that the $40 billion merger, which was first announced in April, is anticipated to be completed by July.

Bank executives have stated that the lender has asked the Reserve Bank of India (RBI) for a phased approach to meet the requirements for the statutory liquidity ratio (SLR), or the portion of deposits that banks must hold in liquid cash, and the cash reserve ratio (CRR), or the percentage of deposits that banks invest in government bonds.

The bank has been growing its investment book and gathering government securities since the merger was announced, despite the RBI’s lack of response to the requests.

According to a news report, this indicates that HDFC Bank will be able to comply with regulatory standards even if the exemption is not granted.

According to a different report, the bank is fully equipped but anticipates clarification from the RBI closer to the merger’s scheduled date.

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