HDFC twins merger: RBI clarifies on HDFC Bank's commercial liabilities. Details here

HDFC twins merger: In response to the HDFC Bank's request to clarify on commercial papers in the wake of HDFC twins merger, the Reserve Bank of India (RBI) has issued clarifications allowing the private lender to hold commercial papers issued by HDFC Ltd till their maturity. However, the central Indian bank asked HDFC Bank to not roll over or re-issue commercial papers issued by HDFC Ltd after effective merger date.

HDFC Bank informed Indian stock market bourses about the RBI's reply on its request citing, "We wish to inform that HDFC Bank had made a request to RBI to provide confirmation about the commercial papers of HDFC Limited. Pursuant to the same, the RBI has, vide its email dated June 16, 2023, advised HDFC Bank that it may hold the commercial papers that were issued till date by HDFC Limited, till their maturity, and that it shall not roll over or reissue any commercial paper after the effective date of the Proposed Amalgamation (“Effective Date”)."

HDFC Bank went on to add that it will also approach the RBI with the crystalized amounts of all the liabilities of HDFC Limited as of the Effective Date.

This RBI clarification is in connection with HDFC Bank's earlier disclosure letter dated April 04, 2022 informing about the decision taken by the Board of Directors of HDFC Bank Limited (“HDFC Bank”) approving the Scheme under Sections 230 to 232 of the Companies Act, 2013, and rules and regulations thereunder, subject to receipt of various statutory and regulatory approvals.

In letter dated 21st April 2023, HDFC Bank had informed Indian bourses about SEBI's approval in regard to proposed change in control of HDFC AMC citing, "We understand that SEBI vide its letter dated April 21, 2023 to HDFC Asset Management Company Limited (“HDFC AMC”), a subsidiary of HDFC Limited and the asset management company of HDFC Mutual Fund (“HDFC MF”), has granted its approval for the proposed change in control of HDFC AMC."

"We also refer to our earlier letters, wherein we had informed you about receipt of no-objection/ approval letters including from stock exchanges, Reserve Bank of India, Securities and Exchange Board of India, Pension Fund Regulatory and Development Authority, Competition Commission of India and Hon’ble National Company Law Tribunal, Mumbai bench," HDFC Bank added.