With a view to consolidate its home loan finance business, IDBI Bank is mulling the merger or sale of its wholly-owned subsidiary, IDBI Homefinance (IHFL), by end-this fiscal, a top bank official said.
"It doesn't make sense for both the bank and its subsidiary to sell the same products. We plan to either merge or sell IHFL," a highly-placed IDBI Bank official told PTI here.
The bank's board is likely to take a decision on the matter by end-March, the official said.
IDBI Bank took over the erstwhile Tata Home Finance in September, 2003 and renamed it as IHFL, solely meant for selling home loan products.
IHFL presently has a home loan portfolio of above Rs 2,700 crore with a presence in 18 centres across the country and 150 employees.
In the event of a merger, the biggest challenge IDBI Bank would have to face will be on the human resources side as the pay-scales of IHFL employees and the bank are different. This has to be looked into during the integration process, the official said.
However, IDBI Bank, which has a home loan portfolio of around Rs 12,000 crore, would lose the customer base of IHFL in case of a sale and this factor too would weigh with the management when it makes its decision.