On April 15, 2019, CCI approved the amalgamation of GRUH Finance Limited (‘GRUH’) and Bandhan Bank, and the subsequent acquisition of 14.96% stake in Bandhan Bank by HDFC Limited (‘HDFC’), subject to the approval of the RBI.

Bandhan Bank is an Indian public listed company and is engaged in the business of providing banking services. GRUH is registered with the National Housing Bank (‘NHB’) as a Housing Finance Company (‘HFC’), engaged in the business of, inter alia, providing housing finance, loans against deposits, loans against property, personal loans etc. Similarly, HDFC is an Indian public limited company, also registered as a HFC with the NHB. HDFC has several subsidiaries, which are present in the sector of financial services.

CCI noted that the activities of the parties broadly competed in segments such as provision of bank accounts, provision of loans, accepting deposits, provision of card based payment services, provision of online banking services, distribution of mutual funds products, and distribution of insurance (life and non-life) products. CCI further carried out a competition assessment at a narrow level with respect to segments such as provision of loans, distribution of mutual fund products, and distribution of insurance products. However, in the absence of any competition concern, the definition of relevant market was left open.

While approving the combination unconditionally, CCI observed that the combined market share of the parties in each of the above-mentioned business segments would be insignificant (including the incremental market share), except in relation to micro loans where the combined market share was in the range of 25-30%. However, no competition concerns were anticipated by CCI even within the segment of micro loans in light of the presence of various competitors, including public sector and private sector banks.