HDFC is going to merge with HDFC Bank. This process will take one to one and a half years to complete. Meanwhile, the customers of both the companies will continue to get services as before. After the news of the merger, HDFC Bank and HDFC customers have many questions in their mind. Let us try to know the answers of some such questions.
What will be the benefits for the customers of both the companies after the merger?
Till the completion of the merger process, the business of HDFC Bank and HDFC Limited will continue as it is going on now. After the merger, the customers of both the companies will benefit. Experts say that the decision of merger will benefit both. “The mortgage business will benefit from HDFC Bank’s low-cost funds. HDFC Bank will benefit from HDFC’s experience in the mortgage business,” said Shivaji Thapliyal, Lead Analyst, Yes Securities.
Since HDFC Bank has a low cost of funds, its home loan customers will benefit from this. The interest rate of HDFC Bank home loan customers is expected to remain low. Raj Khosla, Founder, MyMoneyMantra said, “After the merger, new home loan customers can get loans at the same or lower interest rates.” However, some experts say that the merger may take 12 to 18 months, so it would not be right to say about the interest rate right now.
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At present, NBFCs do not have to follow the external benchmark rule, whereas banks have to. What will be the difference for customers taking home loan from HDFC Bank?
Currently, HDFC Ltd’s home loan interest rate is among the lowest in the industry. It is only 6.7%. Adil Shetty, CEO, Bankbazaar.com said, “We expect the home loan interest rate to remain low even after the completion of the merger process. The home loan interest rate is not expected to rise much after adopting the external benchmarking regime. More It may increase by a few basis points. Hence, HDFC home loan customers need not panic, he added.
I have a deposit with HDFC Bank, what will be the interest rate on the deposit after the merger?
A deposit is primarily a contract between the depositor and the bank (or financial institution). “There will be no change in the deposit rate and its associated terms and conditions till the maturity of the deposit,” Shetty said. It can be understood with the help of an example. Suppose you have made a deposit in HDFC, whose interest rate is 6.5 percent and maturity is March 2026, then the interest rate will remain the same till maturity. The merger process will be completed by maturity. Then the interest rate of the deposit may change at the time of renewal.
What are the things I need to keep in mind while applying for personal loan, credit card, auto loan or cross-selling of products from HDFC Bank?
A wide range of products will be available to HDFC Bank customers. Currently, 70% of HDFC customers do not have an account with HDFC Bank. This shows that there is a lot of potential for cross-selling of the products. On the other hand, 80 percent of HDFC Bank customers have not taken a home loan. Thapliyal said, “At present, the problems in loan sanction and disbursal will go away after the merger. HDFC Bank will get an opportunity to sell life insurance and non-life insurance products to its customers.”
I have a home loan account with HDFC and have made a deposit, can there be a change in my account number?
Yes, your account number may change after merger. Shetty said, “It is a long process. We have seen this in the merger of public sector banks. It is difficult to say right now what kind of changes you will face. But, it is certain that HDFC Bank will give you this opportunity. Will give you all the information about it.”