The merger with will create a large balance sheet capable of carrying large exposures and result in higher credit growth for the Indian economy, HDFC Bank Chairman Atanu Chakraborty said on Saturday. He added that the strong distribution network will support the growth of the home finance business.

“A large and more stable balance sheet that would result from the merger would also allow us to increase our exposure and enable higher credit growth in the economy,” Chakraborty said while addressing shareholders at the annual meeting. “We have discussed the rationale and merits of the merger on several occasions. Home finance will be a huge growth opportunity over the next decade and one of the key drivers of India’s GDP. With the benefit of lower financing costs and the addition of our strong distribution network that we have built, among several other factors, it is a great advantage to take advantage of this opportunity.”

He added that the bank has made the necessary merger-related applications to various authorities and the board is closely monitoring the merger process in order to approve various aspects of the merger as required by legal process.

Chakraborty also said that HDFC Bank is poised to take advantage of the opportunities as India is expected to grow at a healthy pace of 8.7%.

“Given the expected resumption of GDP growth, the tremendous scope of banking opportunities in India, the tremendous strength of our business and our robust balance sheet, we believe we are very well positioned to capitalize on the immense opportunities ahead, ” he said. “The bank has the strategy and roadmap to achieve growth with stability and profitability. I have great confidence in our ability to reliably meet the expectations of our customers, stakeholders and employees.”

Despite the numerous unforeseen challenges that have severely strained trade flows and the international financial system, HDFC Bank chairman said he is confident that the government and the RBI will manage to control inflation.

“As both the RBI and the government take action to combat inflationary pressures, retail inflation is also likely to moderate in the coming months, further supporting consumer demand,” he said. “The medium-term outlook for the economy remains optimistic and macroeconomic fundamentals remain strong, putting India in a better position to weather major global shocks.”