mumbaithe boards of various companies in the chennaibased shriram and idfc group have agreed to pursue a proposal to merge retail lending business of shriram with idfc bank and bring all other financial businesses of the chennaigroup under the banks holding company idfc idfc the infrastructure lending company which transformed into a bank in 2015 will benefit from the retail franchise of shriram for the chennaibased group being part of a bank will enable crossselling several products to their borrowers who run into millions senior management of both groups said this would create a financial conglomerate with a universal bank at its centre that could become indias largest mass retail financial platformthe merger follows the entry of ajay piramal as strategic investor into the shriram group in may 2013 which is led by its octogenarian founder r thyagarajan idfc was the created following former finance minister p chidambarams announcement in his 199697 budget to set up a company to lead funds into infrastructure idfc converted itself into a bank in october 2015 but it continues to have an overhang of wholesale lending which is going through stress because of the economic environment deepak parekh founder chairman of idfc was also part of merger negotiations it is no backdoor entry into banking we as a group do not believe in anything backdoor we will follow whatever rbi says on this said ajay piramal chairman shriram capital the holding company for truckfinancier shriram transport finance and retaillender shriram city union finance he added that shareholders of shriram will get a stake in the holding company idfc and also in idfc bank over the years we have grown on the strength of our partnerships our partnership with piramal has given us the strength to go ahead with this merger said thyagarajan according to parekh the merger benefits idfc as it needs retail assets to set up a branch is extremely difficult with this merger the bank gets 1000 plus points of presence said parekha statement by the two groups said that they have agreed to enter into a confidentiality exclusivity and standstill agreement to evaluate a potential strategic combination of certain businesses and subsidiaries affiliates and associate companies of the shriram group with the idfc group a host of shriram group companies which include the flagship shriram transport finance with a 80000 crore loan book the life and nonlife insurance companies and asset management company shriram city union finance which has a 23000 crore loan book is proposed to be merged with the bank the valuations are not done no transaction has been approved by the board shareholding board seats are yet to be discussed we have only entered into an exclusivity arrangement for 90 days to jointly explore an opportunity for a merger said piramalthis in many ways is a marriage made in heaven because of the complementarity of our business said rajiv lall md ceo idfc bank he said that while idfc had a large wholesale book and access to