The country’s largest private lender HDFC Bank on Thursday said the Reserve Bank has refused to make any exceptions on the cash reserve ratio (CRR) and statutory liquidity ratio (SLR) requirements as sought by it ahead of the merger of mortgage financier parent HDFC with itself.

The central bank has, however, allowed some leeways on the priority sector lending front, the bank said in a letter to the exchanges.

HDFC Bank and HDFC announced their merger last April and are awaiting the final regulatory go-ahead, for which HDFC Bank has sought relaxations on certain regulatory requirements from the RBI.

The bank informed the exchanges that it has received a letter from the RBI with views on certain matters, while clarity on other requests is expected in due course.

“HDFC Bank shall continue to comply with extant requirements of CRR, SLR and LCR (liquidity coverage ratio) from the effective date (of merger) without exceptions,” the lender said quoting the letter from RBI.

Under the cash reserve ratio rules, a bank must park 4.5 per cent of its total deposits with the RBI as liquid cash on which it earns no interest. Statutory Liquidity Ratio (SLR) refers to the minimum percentage of deposits that banks are mandated to maintain as gold assets, cash or government-approved securities, in their own vaults. The current SLR rate is 18 per cent.

The liquidity coverage ratio refers to the proportion of high-quality liquid assets held by financial institutions, to ensure their ongoing ability to meet short-term obligations. The minimum LCR is currently pegged at 100 per cent.

On PSL (priority sector lending), the RBI has told the bank that adjusted net bank credit may be calculated considering one-third of the outstanding loans of HDFC as on the effective date of the amalgamation for the first year, and the remaining two-thirds of the portfolio of HDFC shall be considered over a period of next two years equally.

Under PSL norms, commercial banks are required to devote over 40 per cent of their overall advances to areas marked as priority sectors.

The RBI has also allowed for the investments including subsidiaries and associates of HDFC to continue as investments of HDFC Bank, the letter said, adding HDFC Bank or HDFC can increase shareholding in HDFC Life Insurance Company and HDFC ERGO General Insurance Company to over 50 per cent prior to the effective date of the merger.

HDFC Bank can continue holding HDFC’s stake in HDFC Education and Development Services, which operates three education schools, for two years.