Deepak Parekh, former Chairman of HDFC, disclosed that ICICI Bank’s then-chief executive Chanda Kochhar had once proposed a merger between ICICI Bank and HDFC, years before HDFC merged with its own banking subsidiary, HDFC Bank.

He said that he declined the offer, saying it would not have been “fair” or “proper with our name and the bank and all.”

“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. You said that ICICI started HDFC. ‘Why don’t you come back home?’ That was your offer,” Parekh said while speaking during a conversation on Kochhar’s YouTube channel.

HDFC Ltd eventually merged with HDFC Bank in a reverse merger completed in July 2023. Parekh explained that the merger was driven primarily by regulatory pressures, particularly after the Reserve Bank of India (RBI) classified HDFC as a systemically important non-banking financial company (NBFC). At the time, HDFC managed assets exceeding Rs 5 trillion, far beyond the Rs 50,000 crore regulatory threshold.

“RBI supported us and they pushed us into it to some extent and they helped us. However no concessions, no relief, no time, nothing,” Parekh said.

“It’s good for the institution. It’s good for the country to have large banks. Look at how large Chinese banks are. We have to be bigger, larger in India,” he said.

He said that India’s banking sector must pursue growth through consolidation. “Indian banks must grow through acquisitions. That’s the only way to build globally competitive institutions,” he said.

On the broader economy, Parekh flagged global uncertainties in supply chains, trade policies, and exports as ongoing challenges facing top executives. He also raised concerns about the insurance sector in India, calling it the “least understood financial product,” and criticised banks for mis-selling insurance driven by high upfront commissions.