Chanda Kochhar once proposed HDFC-ICICI merger, reveals Deepak Parekh

Before the HDFC-HDFC Bank merger, Chanda Kochhar had pitched an ICICI-HDFC merger, says Deepak Parekh in a rare public disclosure

Deepak Parekh, former Chairman of HDFC, recently disclosed that ICICI Bank's then chief, Chanda Kochhar, had once proposed a merger between HDFC and ICICI Bank—years before HDFC’s merger with its own banking arm.

 

Speaking during an interaction on Kochhar’s YouTube channel, Parekh recounted, “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 said he politely declined the offer, saying it would not have been “fair” or “proper with our name and the bank and all.”

 

The much-publicised reverse merger between HDFC Ltd and HDFC Bank was finally completed in July 2023. Parekh explained that the merger was largely prompted by regulatory expectations. The Reserve Bank of India (RBI) had classified non-banking financial companies (NBFCs) like HDFC—then managing assets exceeding ₹5 trillion—as systemically important, crossing the regulatory threshold of ₹50,000 crore.

 

“RBI supported us and they pushed us into it to some extent and they helped us,” Parekh said. However, he clarified there were “no concessions, no relief, no time, nothing.”

 

Reflecting on the final day of the merger, Parekh called it both “a sad day and a happy day.” He added, “It's good for the institution. It's good for the country to have large banks. Look at how large Chinese banks are. We have to be bigger, larger in India.”

 

Parekh believes India must foster consolidation in the banking sector to build globally competitive institutions. “Banks in India must grow through acquisitions,” he stressed.

 

On the broader economy, Parekh flagged ongoing global uncertainty in supply chains, trade policy, and export dynamics as major worries for top CEOs.

 

He also expressed concerns about the insurance sector, calling it the “least understood product” in India. He further criticised “mis-selling by banks” driven by high upfront commissions.