Public sector lender, IDBI Bank is set to merge its housing finance wing, IDBI Homefinance with itself. This idea of the bank comes with the view to consolidate its home loan business and thus fetch a larger chunk of market share.
The Board of IDBI Bank has given its nod for the merger. The home loan business of the bank currently runs under two heads: the bank's housing finance wing and IDBI HomeFinance (IHFL).
"It did not make any sense to us (continuing the subsidiary as it is). Hence the decision to merge," IDBI Bank Executive Director and Retail Banking Group Head R K Bansal said.
IHFL was formed when IDBI took over Tata Home Finance in September 2003 and christened it with the name IHFL. As per March end 2010, the outstanding home loan portfolio of IHFL stands at Rs3,537 crore as compared to Rs 3,089 crore in the fiscal prior to that.
The net NPAs of the home loan arm stand at 0.34 per cent and capital adequacy ratio at 13.31 per cent. IHFL is present in 18 centres and over 150 employees.
Talking about the state of employees of IHFL after the merger, Bansal said, "those things have to be worked out," but hinted that the 150-odd staff could be retained.