Former HDFC chairman Deepak Parekh reveals BIG secret about ex-ICICI chairman Chandra Kochhar, 'That was your offer...'

Former HDFC Chairman Deepak Parekh has revealed that former ICICI Bank chief Chanda Kochhar once wanted to acquire HDFC, and a merger between the two banks, well before HDFC-HDFC bank merger in 2023.

Deepak Kochhar spilled this 'merger proposal' secret during a candid conversation with Chanda Kochhar on her channel. He said, "I remember you talking to me once. I remember it very clearly. It's never been talked about in public, but I'm willing to share it now. You said that ICICI started HDFC. 'Why don't you come back home?' That was your offer." 

Parekh added that he turned down the offer, as he believed that it, "won't be fair". He added that he denied as he thought, "it won't proper with our name and the bank and all."

HDFC-HDFC Bank merger

The HDFC-HDFC Bank merger was finalized in July 2023. The deal was valued at $40 billion. As per reports, HDFC Bank issued 42 new equity shares for every 25 equity shares held in HDFC Ltd, and one of the largest financial institution of India was created. Millions of its customers and shareholders were affected due to the merger.

Deepak Parekh state that this was primarily driven by regulatory requirements rather than corporate ambition, as Reserve Bank of India reclassified large Non-Banking Financial Companies (NBFCs) like HDFC, which held assets over ₹5 lakh crore, as systemically important, this crossed the regulatory threshold of ₹50,000 crore and finally led to the merger.

According to Deepak Parekh, the RBI supported and pushed for the merger, “RBI helped us, there were no concessions, no relief, no time, nothing.”

About the merger, he revealed that it was kept extremely confidential from the Public. "It was kept a secret. No one knew about it, when it hit the press in the morning, that’s when everyone found out. The government was aware because RBI was in touch with them, and we kept it so close—just lawyers, due diligence, accountants,” he said.

Parekh revealed that the day of merger was "both sad and happy day." He further stated that it was foo for the country to have large banks, like how Chinese banks are. However,  it marked the end of HDFC as a standalone entity. 

In the last, he also stated that acquisitions are important for the banks to remain strong in the competition. He called the insurance sector as "the least understood product" due to banks "mis-selling policies", as they are lured by the  high upfront commissions.