RBI directs banks to control harassment by recovery agents           

The Reserve Bank of India (RBI) on Friday ordered banks, non-banking financial entities, and other regulated institution to make certain that they and their loan recovery agents do not harass borrowers. RBI circulated a notice which said that the central bank has inspected that recovery agents are departing from instructions for deploying financial services. It instructed regulated entities to make sure that they don’t call the borrowers via phone before 8.00 am and after 7.00 pm. It advised against making wrong and misleading representation to borrowers.

Regulated institutions and their agents must not avail to “intimidation or harassment of any form, either be it verbal or physical, against any person during their debt collection efforts, in addition of any acts executed to humiliate publicly or infringe upon the privacy of the debtors’ family members, friends and referee, transmitting inappropriate messages either on mobile or through social media, making terrifying and/ or anonymous calls.” Any violation will be taken seriously, said the RBI circular that applies to all commercial, rural and regional, non-banking financial companies, and small finance banks including housing finance companies. Payments banks are ruled out. All-India financial institutions including the National Bank for Agriculture and Rural Development, the Small Industries Development Bank of India, National housing Bank, National Bank for Financing Infrastructure and Development, EXIM Bank also fall under the purview of the circular.

CCI sanctions amalgamation of HDFC with HDFC bank

The massive merger of HDFC Limited, which is the India’s largest housing finance company, with HDFC Bank, the India’s largest private sector bank by balance sheet size, reached a step closer to final closure with the Competition Commission of India (CCI) permitting its sanction for the transaction. The CCI revealed in a tweet on Saturday that Commission approves suggested combination involving merger of HDFC Limited, HDFC Bank, HDFC Investments and HDFC Holdings. It might be remembered that the Boards of HDFC and HDFC Bank had on April 4 sanctioned a scheme of amalgamation, which was invoiced as the biggest merger and amalgamation transaction in corporate history of India. After the merger, the combined balance sheet will sum up to ₹ 17.87 lakh crore and the total worth of the united entity will be ₹3.3 lakh crore on December 2021. On April 1, 2022, the market capitalization of HDFC Bank was approx. ₹8.36 lakh crore ($110 billion) and that of HDFC was around ₹4.46 lakh crore ($ 59 billion). Once completed, the fusion will create India’s largest financial giant by market capitalization. The merger is anticipated to be achieved by the second or third quarter of FY24.Once the deal is completed with all regulatory sanctions, HDFC Bank will be 100 percent possessed by public shareholders and existing shareholders of HDFC will possess 41 per cent of the bank. HDFC shareholders will receive 42 shares of HDFC Bank for every 25 shares held.