MUMBAI: HDFC, India’s first mortgage institution, which has helped over 1 crore Indians buy homes since the late ’70s, will cease to exist after this weekend and its business will be absorbed by HDFC Bank.

The boards of HDFC - HDFC Bank will meet on June 30 to complete the merger before July 1, said Deepak Parekh, who drove the group’s success for four decades.Parekh said shares of HDFC are expected to stop trading on July 13.

As part of the merger, HDFC shareholders will receive 42 bank shares for every 25 shares held.

At current market prices, the merged entity would be worth $175 billion, making it the fifth-most valuable bank in the world.“All depositors will get the rate of interest they were promised until the tenure of the deposit,” said Parekh.

Similarly, the applicable rates will continue until the loans are repaid.

However, new loans and deposits will be subject to banking regulations.The amalgamation of the businesses, which was announced in April 2022, will result in HDFC offices being converted into those of HDFC Bank and the mortgage lender’s staff too becoming bank employees.Most top execs to retireThe merger would also result in most of the corporation’s top management retiring from the institution they led for years.

Parekh (78) said he would hang his boots after the merger, although he is likely to work with HDFC Foundation.

Also, all executives in HDFC who are over 60 would be retiring.

This would include VC - CEO Keki Mistry and MD Renu Sud Karnad.The RBI has relaxed an earlier directive that barred education loan company HDFC Credila from granting fresh loans once its ownership is transferred to HDFC Bank.

The restrictions have now been relaxed to allow the institution to grant fresh loans until its sale to Barings Private Equity and ChrysCapital is concluded.The merger would also end the group’s plans to expand into the education segment by setting up schools in Gurugram, Pune and Bengaluru.

After the merger, HDFC Bank has been given two years to sell HDFC schools which the bank will inherit from HDFC.

One of the possibilities would be selling the schools to the existing management.The merger has been approved by the RBI, the National Company Law Tribunal, markets regulator Sebi, insurance - pension regulators, the Competition Commission of India, and stock exchanges.