Deepak Parekh reveals Chanda Kochhar once pitched HDFC-ICICI merger years before 2023

Former HDFC chairman Deepak Parekh revealed that ex-ICICI Bank chief Chanda Kochhar once made an audacious pitch, proposing a merger of the two financial powerhouses well before HDFC’s eventual union with its banking arm.

“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,” Parekh told Kochhar during a candid conversation on her channel. 

“You said that ICICI started HDFC. ‘Why don’t you come back home?’ That was your offer.” Parekh said he turned it down, calling it “unfair” and “improper” given the brand identity and banking structure of HDFC.

The eventual HDFC-HDFC Bank merger, finalized in July 2023, was not born of corporate ambition but regulatory push, Parekh said. 

The Reserve Bank of India had reclassified large NBFCs like HDFC—with assets exceeding ₹5 lakh crore—as systemically important, far above the ₹50,000-crore threshold.

“RBI supported us and they pushed us into it to some extent, and they helped us,” Parekh noted. Still, he emphasized, “there were no concessions, no relief, no time, nothing.”

The deal was kept under extraordinary secrecy. “It was kept a secret. No one knew about it—when it hit the press in the morning, that’s when everyone found out. The government was aware because RBI was in touch with them, and we kept it so close—just lawyers, due diligence, accountants,” he recalled.

For Parekh, the day the merger closed was both “a sad day and a happy day.” While it marked the end of HDFC as a standalone entity, he said the move was essential for India to build banks that can compete globally. “Look at how large Chinese banks are. We have to be bigger, larger in India.”

He warned that Indian banks will need to grow through acquisitions to stay competitive. On broader macroeconomic concerns, Parekh cited ongoing supply chain disruptions, export instability, and shifting trade policies as key worries for CEOs.

He also didn’t mince words on the insurance sector, calling it “the least understood product” and slamming banks for mis-selling policies driven by high upfront commissions.