RBI Relaxes Restriction on Onboarding of New Customers by HDFC Credila
Key Highlights :
The Reserve Bank of India (RBI) has relaxed the restriction on the onboarding of new customers by HDFC Credila. This was revealed in a regulator filing on Tuesday, wherein the RBI vide its letter dated April 20, 2023, had provided certain forbearance/clarifications. As per the filing, RBI had permitted the transfer, in terms of the scheme, of shareholding of HDFC Limited in HDFC Credila Financial Services Limited (HDFC Credila) and had advised that shareholding in HDFC Credila be brought down to 10 per cent within two years from the effective date of the scheme.
The relaxation of the restriction is subject to the condition that HDFC Credila would make an application for change in shareholding of HDFC Credila as an NBFC to RBI before July 31, 2023 and that the shareholding of HDFC Bank in HDFC Credila be brought down to 10 per cent on or before March 31, 2024. This relaxation comes in the wake of the reverse merger of housing finance major HDFC with its banking subsidiary HDFC Bank, which will be effective July 1.
The merger is one of the biggest transactions in the history of India Inc, with the combined asset of the two entities amounting to over Rs 18 lakh crore. HDFC Bank had agreed to take over its parent, which is the largest pure-play mortgage lender, in a USD 40 billion all-stock deal. The merger will create a financial services titan with a wide range of products and services.
The RBI's relaxation of the restriction on onboarding of new customers by HDFC Credila is expected to be a major boost to the company's business. HDFC Credila has been providing loans to students for higher education since 2008, and the RBI's move will enable the company to expand its reach and offer its services to a larger number of customers.
The RBI's decision will also benefit students, who will now have more options to finance their higher education. HDFC Credila has been providing loans to students with competitive interest rates and flexible repayment options, and the relaxation of the restriction will make it easier for students to access these loans.
The RBI's move is a welcome step and will go a long way in helping HDFC Credila reach more customers and provide more students with access to higher education. It is expected that the company will be able to expand its business and reach more students in the coming years.
