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HDFC Bank: Why competition was to blame for its decision to hike interest rates, HDFC Bank interest rates, hdfc bank loan, HDFC Bank, HDFC Life
HDFC Bank: Why competition was to blame for its decision to hike interest rates.
HDFC Bank has written to the RBI to allow it to hold a 50 per cent stake in HDFC Life, the life insurance subsidiary of HDFC Ltd, which will become a subsidiary of the bank after the merger.
However, the RBI rejected this and forced the bank to increase its stake to only 22.5 percent.
As per the RBI policy, 50% ownership of a life insurance company can be held by the lending bank that will get it a life insurance license.
The Reserve Bank of India has not allowed such measures in the past.
With the government allowing FDI of up to 49% in insurance, HDFC can win back the business they lost.HDFC Bank interest rates
It's been a year since HDFC Bank acquired Capital First. The bank recently said it was facing a number of problems following its acquisition of Capital First.
The bank has increased interest rates on home loans, which could cause a drop in its income. The bank was also predicted to lose Rs 50,000 crore worth of wholesale credit.
Why did HDFC bank lose in the market competition?
HDFC Bank, the country's largest private lender, lost about Rs 50,000 crore in wholesale loans to market competition after it raised interest rates in May, Chief Financial Officer Srinivasan Vaidyanathan said in a call with analysts.
"We lost in market competition by raising rates. We lost roughly Rs 50,000 crore of wholesale business in the June quarter,” Vaidyanathan said.hdfc bank loan
The bank's net interest income (NII) rose 4.8 percent year-on-year to Rs 7,904.5 crore in the quarter ended June 30, the lowest growth in at least seven quarters.
Net interest margin (NIM), or the difference between interest earned on loans and interest paid on deposits, was 3.2 percent, down 10 basis points (bps) from the March quarter.HDFC Bank interest rates
What is the reason HDFC bank lost so many loans?
HDFC Bank, the country's largest private sector lender, lost around Rs 50,000 crore in competition for wholesale loans after it raised interest rates in May, Chief Financial Officer Srinivasan Vaidyanathan said in a call with analysts.
In a conference call last week, Vaidyanathan said the bank lost about 45,000 to 50,000 crore rupees in its wholesale loan book in the June quarter. hdfc bank loan
The bank is trying to get it back by lowering interest rates. The bank is trying to get it back by lowering interest rates. HDFC Bank interest rates
HDFC Bank reported a 16.8 percent rise in net profit to Rs 3,908 crore for the three months ended June as the country's largest private sector lender by assets reduced bad loans and posted its highest-ever quarterly loan growth.
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What will happen after merger of HDFC bank and HDFC life?
HDFC Bank (NYSE: HDB ), India's largest private sector bank, is set to merge with HDFC Life Insurance.
HDFC Bank will hold a 50% stake in the merged entity. HDFC Bank and HDFC Life are in the process of obtaining necessary clearances from the Reserve Bank of India (RBI) and other regulatory authorities for the merger.
The merger would be structured as a stock exchange. HDFC Bank's stake in the merged entity will rise to 55.1% from the current 33.4% through the share swap.
HDFC Bank has written to the RBI to allow it to hold a 50 percent stake in HDFC Life, the life insurance subsidiary of HDFC Ltd, which will become a subsidiary of the bank after the merger, Vaidyanathan said.
"The RBI has asked us to come back with a detailed proposal," he said, adding that the bank was awaiting the RBI's approval. "This is not a regulator's decision, but management's," he said.HDFC Bank interest rates
What are the challenges facing HDFC Banks?
HDFC Bank, India's second-largest lender, reported a 22.8 percent rise in net profit to Rs 2,464 crore for the quarter ended June 30 as asset quality and loan growth improved.
The bank, in a board meeting on Saturday, said it will discuss the proposed merger of its life insurance subsidiary HDFC Life with the capital markets bank and also consider the stake it will be allowed to hold in the Reserve Bank of India.
Shares of HDFC Bank closed at Rs 1,376.50 on the BSE, up 0.45 percent from the previous close.
What are HDFC life returns?
HDFC Life, a joint venture between HDFC and ICICI Bank, is India's third largest private insurance company in terms of premium income and offers protection, savings and pension products.
The company reported a 50 percent rise in standalone profit after tax of Rs 1,046 crore for the year ended March 31, 2017. HDFC Life's gross premium income for the financial year 2016-17 was Rs 9,999 crore (up 12 percent)
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What is the name of the merger and what is the share capital of HDFC Bank?
HDFC Bank on Monday merged with its subsidiary HDFC life.
The merged entity, which will be called HDFC Bank Ltd, will not only be a bank but also an insurance company.
The share capital of HDFC Bank will be Rs 15,000 crore, of which Rs 9,500 crore will be the paid-up capital of HDFC Bank and the rest will be the paid-up capital of HDFC life.
The total paid up capital of HDFC Bank and HDFC Life will be Rs 15,000 crore.
The bank raised its marginal cost of funding based lending rate (MCLR) by 1.5 percent in May and has since been the highest in the industry. hdfc bank loan
The bank is losing loan share despite a near-zero prime rate, Vaidyanathan said.
Conclusion:
The combined entity will have a net worth of Rs 705.6 billion and a total business of Rs 15.8 trillion as measured by assets under management/insurance in force.
We hope you enjoyed our article on HDFC Bank and HDFC Ltd merger.
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