…AND THE CHALLENGES AHEAD

The difficulties in the path to a merger

The combined entity’s balance sheet will have increased CRR and SLR requirements

Margins likely to be compressed in the short- to medium term

The bank’s CASA ratio will fall from 46 per cent to 37 per cent

RBI’s permission is awaited on whether HDFC Bank can retain HDFC Ltd’s stake in the insurance business or can hold a higher stake

There is a possibility that the RBI will insist on a non-operative financial holding company structure