ICICI Wanted to Acquire HDFC, Reveals Deepak Parekh
In a candid revelation, Deepak Parekh, former Chairman of HDFC Ltd, disclosed that ICICI Bank once proposed to acquire HDFC—long before the landmark merger between HDFC Ltd and HDFC Bank was finalized. The disclosure was made during a conversation on Chanda Kochhar’s YouTube channel, where the former ICICI Bank CEO herself had made the informal pitch years ago.
ICICI’s Proposal to HDFC
Recalling a conversation with Kochhar, Parekh said, “I remember you talking to me once… You said that ICICI started HDFC. ‘Why don’t you come back home?’ That was your offer.” However, he declined the offer at the time, asserting that it wouldn’t be appropriate given HDFC’s identity and structure. “It wouldn’t be fair or proper with our name and the bank and all,” he added.
RBI’s Role in the HDFC-HDFC Bank Merger
Parekh revealed that the eventual merger of HDFC Ltd into HDFC Bank was driven significantly by regulatory pressure. The Reserve Bank of India had categorized HDFC as a systemically important non-banking financial company (NBFC) due to its massive asset base, crossing ₹5 lakh crore.
“RBI supported us and they pushed us into it to some extent and they helped us,” Parekh stated, while also making it clear that the RBI gave no concessions, no relief, and no additional time to facilitate the deal. He noted that despite the support, the process involved strict compliance with regulatory expectations.
A Confidential Megamerger with National Impact
The merger, valued at approximately $172 billion, was carried out under tight secrecy, involving only a select group of legal and financial advisors. The announcement came as a surprise when it was made public, with even internal teams unaware until the last moment. Parekh reflected on the day the merger became official as “a sad day and a happy day,” highlighting the emotional weight of ending HDFC Ltd’s independent legacy, while acknowledging the importance of creating a global-scale Indian bank.
Banking Scale Through Consolidation
Parekh stressed that India needs larger banks to compete on the world stage. He pointed out that with over 120 million customers, the newly merged HDFC Bank now has the reach, valuation, and scale to stand alongside international financial institutions. He also used the platform to express concern about the broader economy, citing disrupted supply chains, trade policy unpredictability, and mis-selling in the insurance sector as pressing issues for financial institutions to address.
Parekh’s disclosures not only shed light on past merger conversations but also underscore the growing importance of strategic consolidation in India’s evolving financial sector.
