Years ago, ICICI Bank’s ex-CEO Chanda Kocchar had suggested the merger between HDFC and ICICI – well before HDFC merged its own banking arm, former HDFC chairman Deepak Parekh revealed in an interaction on Kocchar’s YouTube channel.
“I remember you talking to me once. I remember it very clearly. It's never been talked about in public, but I'm willing to share it now. You said that ICICI started HDFC. 'Why don't you come back home?' That was your offer,” Parekh recalled.
However, Kocchar politely declined the offer. “It would have been fair or proper with our name and the bank and all,” said Parekh.
The widely discussed reverse merger of HDFC Ltd with HDFC Bank was officially completed in July 2023. Parekh explained that the move was driven primarily by regulatory pressure. The Reserve Bank of India (RBI) had designated NBFCs like HDFC, whose assets had surpassed ₹5 trillion, as systemically important, having crossed the critical ₹50,000 crore threshold.
“RBI supported us and they pushed us into it to some extent and they helped us. There were no concessions, no relief, no time, nothing,” said Parekh.
He further reflected on the final day of merger, calling it both a “sad day” and a “happy day”. “It’s good for the institution. It’s good for the country to have large banks. Look at how large Chinese banks are. We have to be bigger, larger in India,” he added.
Parekh has also called for greater consolidation in India’s banking sector, emphasising that building globally competitive institutions.” Banks in India must grow through acquisitions,” he added.
Discussing the broader economic landscape, he pointed to persistent global volatility, especially around supply chains, trade policies, and exports, as key concerns among business leaders.
Parekh also raised red flags about the insurance industry, describing it as one of the most misunderstood financial products in the country. He criticised banks for frequently mis-selling insurance, often incentivised by hefty upfront commissions.
In April this year, HDFC Bank reached a major milestone by surpassing ₹15 lakh crore in market capitalisation. But behind the spotlight, a more subtle shift has been taking place in the private banking sector.
ICICI Bank has quietly outpaced HDFC Bank across several key performance indicators and is increasingly viewed as the leading private lender in the country.
Meanwhile, HDFC Bank continues to work through the post-merger challenges stemming from its 2023 integration, which have impacted its growth trajectory.
