What makes HDFC Ltd-HDFC Bank merger an attractive proposition now

Combined entity would be nearly half SBI's size and in an indisputable No 2 slot; cost of funds a hurdle though

Speculations around a merger of HDFC Limited (HDFC) and its banking subsidiary HDFC Bank aren’t new to the industry or the markets. 

With the Reserve Bank of India’s (RBI’s) internal working committee recommending that well-run large non-banking financial companies (NBFCs) may be considered for conversion into banks, there is buzz over the merger of the HDFC twins. The report has also resuscitated the idea of having a non-operative financial holding company (NOFHC) structure for the banks. 

For HDFC, with an asset size of Rs 4.6 trillion, there are more reasons this time to merge with HDFC Bank. 

“It is definitely an attractive idea