Private banks in India have seen many mergers over the past 10 to 15 years. These mergers have changed the banking industry. They help banks grow, become more stable and compete better. Mergers allow banks to reach more customers, improve services and use resources wisely. From ICICI Bank's merger with Bank of Rajasthan in 2010 to HDFC Bank's huge merger with HDFC Ltd in 2023, these deals have strengthened India's banking system. The RBI approves all bank mergers and directly intervenes when stability is at risk, such as in the Lakshmi Vilas Bank-DBS merger. Other mergers like Kotak-ING and HDFC-HDFC, were market-driven and strategic. This article looks at major private bank mergers, their reasons, processes and effects in a fast-changing market.
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Bank Mergers in India
Over the last 10 to 15 years (2010–2025), private bank mergers in India have transformed the banking world. These mergers combine a bank’s operations, assets and debts to create bigger, stronger banks.
The new banks can better compete with fintech companies and global banks. Mergers happen to help banks grow, cut costs, and stay financially stable. Examples include ICICI Bank merging with Bank of Rajasthan in 2010, Kotak Mahindra Bank with ING Vysya in 2015, and HDFC Bank with HDFC Ltd in 2023.
These mergers expanded the banks’ reach and services. The RBI often supports these mergers to keep the banking system stable.
Mergers bring benefits like innovation and better customer access, but they also face challenges, such as combining different systems and workplace cultures.
ICICI Bank Merges with Bank of Rajasthan (2010)
In 2010, ICICI Bank, a top private bank in India, merged with Bank of Rajasthan. This was an all-stock deal worth about Rs 3,000 crore. ICICI Bank gave its shares to Bank of Rajasthan shareholders at a ratio of 25 ICICI shares for every 118 Bank of Rajasthan shares.
Bank of Rajasthan had problems with governance and financial stress. The RBI had fined it for rule-breaking, so it needed a stronger partner. ICICI Bank wanted to grow in northern India, where Bank of Rajasthan had over 460 branches, mostly in Rajasthan. This merger helped ICICI Bank add rural and semi-urban customers to its city-focused customer base.
The merger process blended operations, technology, and employee rules. ICICI Bank took in Bank of Rajasthan’s staff and branches smoothly, keeping disruptions low for customers. After the merger, ICICI Bank’s branch network crossed 2,500 branches, boosted by the addition of Bank of Rajasthan’s 463 branches especially in northern India. The merged bank had a bigger deposit base and could lend more money, which helped it handle the effects of the global financial slowdown. Customers gained access to ICICI’s advanced digital services, and the merger improved the bank’s overall asset quality.
This merger showed how private banks can use mergers to fix weaknesses and create value, setting an example for future deals.
Read about the Merger of Yes Bank
Kotak Mahindra Bank Merges with ING Vysya Bank (2015)
In 2015, Kotak Mahindra Bank merged with ING Vysya Bank in an all-stock deal worth around Rs 15,000 crore. The share swap ratio was 725 Kotak shares for every 1,000 ING Vysya shares.
Kotak wanted to grow in southern India, where ING Vysya had a strong network of over 570 branches. ING Vysya, a joint venture between ING Group and local partners, struggled to grow because of its smaller size. The merger combined Kotak’s expertise in retail and wealth management with ING Vysya’s strength in corporate banking. The RBI approved the deal quickly, seeing it as a way to build stronger private banks.
The merger focused on combining IT systems and rebranding branches. Kotak kept most of ING Vysya’s employees and trained them to fit its culture. The process took about a year, and customers faced little disruption as accounts and services moved smoothly.
The merger made Kotak India’s fourth-largest private bank, with assets over Rs 2 lakh crore. It grew Kotak’s customer base to over 10 million and diversified its loan portfolio. Shareholders saw their investments grow, and the bank lowered its cost-to-income ratio through efficiencies. This merger showed how private banks use mergers to expand across India.
Read about Andhra Bank Mergers with Union Bank of India.
IDFC Bank Merges with Capital First (2018)
In 2018, IDFC Bank, a new bank, merged with Capital First, a non-banking financial company (NBFC), to create IDFC First Bank. The deal was worth Rs 7,000 crore. Capital First shareholders got 139 IDFC Bank shares for every 10 they held.
IDFC Bank focused on infrastructure financing but wanted to grow into retail lending. Capital First was strong in consumer and small business loans but couldn’t access low-cost deposits without a banking license. The merger created a bank with strengths in both wholesale and retail banking. The RBI approved it to support universal banking.
The merger combined Capital First’s flexible lending approach with IDFC’s strong funding base. Teams worked to unify credit processes and digital platforms. Customers got faster loan approvals and better savings options.
After the merger, IDFC First Bank’s assets grew to over Rs 1.5 lakh crore, with a stronger deposit base. It relied less on wholesale funding and improved profits by cross-selling products. This merger showed how banks can enter high-growth areas like micro-loans by merging with NBFCs.
IndusInd Bank Merges with Bharat Financial Inclusion (2019)
In 2019, IndusInd Bank merged with Bharat Financial Inclusion, a leading microfinance NBFC, in an all-stock deal worth Rs 15,000 crore. Bharat Financial shareholders received 639 IndusInd shares for every 1,000 they held.
IndusInd wanted to reach more rural customers, where Bharat Financial served over 10 million borrowers. Bharat Financial, once called SKS Microfinance, struggled with funding as an NBFC. The merger gave it access to cheaper deposits and banking systems. The RBI supported the deal to promote financial inclusion.
The merger blended Bharat Financial’s group-lending model with IndusInd’s operations. Employees received training, and technology upgrades made loan disbursals faster.
The merged bank expanded to underserved areas, with assets over Rs 2 lakh crore. It improved asset quality and spread risks. Customers benefited from new services, like savings accounts alongside micro-loans, supporting inclusive growth.
Know about the Public Sector Bank Merger.
Bandhan Bank Acquires Gruh Finance (2019)
In 2019, Bandhan Bank merged with GRUH Finance through a share-swap ratio of 568 Bandhan shares for every 1,000 GRUH shares. The transaction was valued at about ₹81,800 crore at announcement, significantly expanding Bandhan’s housing finance portfolio.
Bandhan, a bank that started as a microfinance company, wanted to enter housing finance. Gruh, a subsidiary of HDFC, focused on low-income housing loans. The merger combined their focus on serving low-income customers. The RBI approved it because it supported housing-for-all goals.
The merger integrated Gruh’s loan portfolio with Bandhan’s deposit base. Branches were rebranded, and staff learned new products.
After the acquisition, Bandhan’s housing loan portfolio grew, pushing its assets to over Rs 80,000 crore. It diversified the bank’s offerings and increased profits, benefiting shareholders.
Lakshmi Vilas Bank Merges with DBS Bank India (2020)
In 2020, the RBI ordered Lakshmi Vilas Bank (LVB) to merge with DBS Bank India because LVB was in financial trouble. DBS invested Rs 2,500 crore, and LVB’s shares were written off instead of swapped.
LVB, an old private bank, had bad loans and governance issues. DBS, the Indian arm of a Singapore-based bank, wanted to grow in India. The RBI stepped in to protect LVB’s depositors and chose DBS for its strong finances.
The merger quickly moved LVB’s 560 branches and customers to DBS. DBS invested in technology and kept most employees.
The merger tripled DBS India’s size, with assets over Rs 50,000 crore. It stabilized LVB’s operations and brought DBS’s global expertise, improving service quality.
Read more about the Merger Examples in India
HDFC Bank Merges with HDFC Ltd (2023)
In 2023, HDFC Bank merged with its parent, Housing Development Finance Corporation (HDFC Ltd), in India’s biggest banking deal, worth Rs 4.5 lakh crore. HDFC Ltd shareholders got 42 HDFC Bank shares for every 25 they held.
Changes in regulations made the merger necessary, as rules for banks and NBFCs became similar. HDFC Ltd, a major housing finance company, merged to create a single lender. It combined HDFC Bank’s deposit strength with HDFC Ltd’s mortgage expertise.
The merger unified products, branches, and systems over months. Customers could access home loans and banking services seamlessly.
The merged bank became India’s largest private bank, with assets over Rs 25 lakh crore. It increased lending power and market share, supporting economic growth.
Check out the Case Study of HDFC Bank Merger!
Summary
Private bank mergers in India over the past 10 to 15 years have reshaped the banking industry. They have created stronger, more competitive banks. From ICICI’s merger in 2010 to HDFC’s massive deal in 2023, these mergers show strategic growth despite challenges. As India moves toward a digital economy, mergers will likely continue to build a strong banking system that supports national growth. Banks must focus on smooth integration to benefit customers, employees, and shareholders.
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Bank Merger: FAQs
Q1. Which bank merged with another bank?
Many private banks merged, like ICICI Bank with Bank of Rajasthan (2010), Kotak Mahindra with ING Vysya (2015) and HDFC Bank with HDFC Ltd (2023).
Q2. Which 10 banks will be merged?
No specific list of 10 banks is confirmed for future mergers; recent mergers include HDFC Bank-HDFC Ltd and others, driven by strategic needs.
Q3. What banks have merged together?
Notable mergers include ICICI Bank-Bank of Rajasthan, Kotak Mahindra-ING Vysya, IDFC Bank-Capital First, IndusInd Bank-Bharat Financial and HDFC Bank-HDFC Ltd.
Q4. Which bank merged with greater bank?
No bank named "Greater Bank" merged in India; you may mean mergers like HDFC Bank-HDFC Ltd, where HDFC Ltd was a major NBFC.
Q5. Which banks merge in SBI?
SBI, a public sector bank, merged with its associate banks (like State Bank of Bikaner) in 2017, not private banks.
