The merger of HDFC and HDFC Bank came into effect from today, July 1, 2023. With this, the over four-decade old home finance company, HDFC, ceases to exist.

As a customer of HDFC Bank, you would not have to face any change, but if you have taken a loan or have any fixed deposits with HDFC, you may witness changes in the process as well as other aspects.

In this context, HDFC Bank has also issued frequently asked questions (FAQ), which you may refer to for further clarity. Here are some of the important things to keep in mind.

FIXED DEPOSIT CUSTOMERS

For those having fixed deposits (FDs) with HDFC Bank, there will be no impact on their deposits as a result of the merger. The rate of interest on FDs and loans will remain the same.

Existing FDs With HDFC

According to HDFC Bank, any FD with HDFC will continue to enjoy the same terms and conditions, including the rate of interest, interest computation, tenure, and payment on maturity instructions until the FD gets matured or is renewed.

The existing FD receipt of HDFC will remain valid till maturity. The account will also remain unchanged and can be referred to for future reference with HDFC Bank.

Renewal of HDFC FDs After Merger

For senior citizens who have an FD with HDFC, if the FD matures after the merger, the renewal will be done at the prevailing terms and rate of interest offered by HDFC Bank. The bank is currently offering interest rates from 3.0 per cent to a maximum of 7.25 per cent for different tenures. For seniors, the rate is typically 0.50 per cent higher than that offered to the public.

Seniors can get a maximum 7.75 per cent interest on their FDs with HDFC Bank. It is the highest FD rate the bank is offering to seniors for the tenure of 5 years and 1 day to 10 years. This is 0.75 per cent higher than the rate being offered to the general public.

The last date for availing this rate of interest is July 7, 2023.

This long-term FD can be withdrawn prematurely after paying some penalty. As this FD is from HDFC Bank, it will have no impact because of the merger.

The FDs with the bank will be covered under the Deposit Insurance and Credit Guarantee Corporation (DICGC) for a maximum limit of Rs 5 lakh, including both principal and interest.

For creating a new FD, existing HDFC customers can either book it through the bank’s portal, or visit the branch or deposit it through a deposit agent or a relationship manager associated with the deposits.

LOAN BORROWERS:

Here are the changes for the HDFC and HDFC Bank loan customers

Effect Of Merger On HDFC Loan Borrower

Similar to FDs, the loan account number, point of reference, and the contractual terms of the loan agreement will remain the same. The equated monthly instalment (EMI) on the loan will also remain the same, with no change.

Will Interest Rate Change? 

The rate of interest will now be linked to the External Benchmark Lending Rate (EBLR) and not to the Retail Prime Lending Rate (RPLR). The rate of interest will not change from the date of the merger. However, with any revision in future, the rate will move as per the EBLR, which is linked to the repo rate.

FINAL WORD

Seniors, who have any relationship, whether for loan or FD with HDFC, are from July 1, 2023 onwards the customers of HDFC Bank following the merger of the two entities. Thus, the terms and conditions of the deposits and loans, and the rate of interest on these applicable in the bank will apply to them from now on.