Winds Of Change!
Massive consolidation in the Indian Banking Sector!
This is my first newsletter, and you will be wondering why on a Thursday! Well, we are in for a long weekend in India (and today is also one of the most auspicious days in the faith I follow) and I hope that most of you would have plans; so, before you leave your homes just grab your coffee/tea and get ready to take a deep dive into India’s largest merger, the mortgage market and the way ahead.
Why the need for merger now and understanding the mortgage market?
a) Tightening of regulations: Post the IL&FS and DHFL fiasco in 2018, RBI has tightened the regulations for NBFCs at regular intervals. In fact, just last year, RBI divided NBFCs into four layers. The top 10 NBFCs are to be always in the top layer irrespective of their size, risk etc. More so the NPA classification for NBFCs is now at par with the banks (RBI recently changed the classification norms for NBFCs). Considering the above scenario, merging HDFC Ltd with HDFC bank was the best decision that the board of HDFC Ltd could ha…
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