PSU lender, IDBI Bank is ready to merge its housing finance arm, IDBI Homefinance with itself. This aim of the bank is meant to combine its home loan business and thus get a bigger chunk of market share.
The Board of IDBI Bank has approved the merger. The home loan business of the bank presently operates under 2 sections: the bank’s housing finance arm and IDBI HomeFinance (IHFL).
The bank’s Executive Director and Retail Banking Group Head R K Bansal stated, “It did not make any sense to us (continuing the subsidiary as it is). Hence the decision to merge”.
IHFL was established when IDBI bought over Tata Home Finance in September 2003 and called it IHFL. As on March end 2010, the unpaid home loan portfolio of IHFL was Rs3,537 crore as against Rs 3,089 crore in the previous fiscal.
The net NPAs of the home loan division was 0.34% and capital adequacy ratio was 13.31%. IHFL operates in 18 centres and has more than 150 employees.
Talking about the employees of IHFL post merger, Bansal said, “those things have to be worked out,” but implied that the 150-odd staff may be retained.