ICICI Bank wanted to merge with HDFC, says Deepak Parekh
21 Jun 2025

Deepak Parekh, the former chairman of HDFC, has revealed that Chanda Kochhar, the ex-MD and CEO of ICICI Bank, had once proposed a merger between their two companies.

The conversation took place long before HDFC's reverse merger with its banking arm in 2023.

Parekh revealed this during an interview on Kochhar's YouTube channel, saying he clearly remembered her suggestion for a merger with ICICI Bank.

Why Parekh turned down Kochhar's offer
Reason

Parekh said he had turned down Kochhar's offer, explaining that it wouldn't be "fair" or "proper with our name and the bank and all."

He also clarified that the HDFC-HDFC Bank merger was more of a regulatory compulsion than a business ambition.

The Reserve Bank of India (RBI) had classified large non-banking financial companies (NBFCs) like HDFC as systemically important, well above the ₹50,000 crore threshold.

'Merger's conclusion was a sad day and a happy day'
Merger sentiment

Reflecting on the merger's conclusion, Parekh said it was "a sad day and a happy day."

He added that while it's good for institutions and countries to have large banks, there were no concessions or reliefs given during this process.

Parekh also emphasized that Indian banks need to grow through acquisitions to strengthen themselves in the future.

'Mis-selling by banks' in insurance sector criticized
Insurance issues

Parekh criticized the "mis-selling by banks" in the insurance sector, which he said is driven by high upfront commissions.

His comments come as HDFC Bank crossed the ₹15 lakh crore market capitalization mark in April this year.

Despite this achievement, a quieter shift has been observed with ICICI Bank steadily outperforming HDFC Bank on key performance metrics.

How ICICI Bank fared against HDFC in FY25
Comparison

In FY25, ICICI Bank posted a 15% profit growth, while HDFC Bank's profits rose by 11%.

Both banks registered similar net interest income (NII) growth. However, ICICI had a higher net interest margin (NIM) of 4.41% compared to HDFC Bank's NIM of 3.65%.

The merger with HDFC added a massive loan book but not an equal amount of deposits to HDFC Bank's balance sheet.