New Delhi, April 4 (TIWN) Housing loan major Housing Development Finance Corporation (HDFC) on Monday said its Board has approved merger of its wholly owned subsidiaries HDFC Investments and HDFC Holdings with HDFC Bank.

Upon the merger scheme becoming effective, the subsidiaries or associates of HDFC will become subsidiaries or associates of HDFC Bank, it said in a regulatory filing to the exchanges.

The proposed transaction is to create a large balance sheet and net-worth that would allow greater flow of credit into the economy.

It will also enable underwriting of larger ticket loans, including infrastructure loans, an urgent need of the country, said the filing.

The merger of India's largest housing finance company (HFC) HDFC with the largest private sector bank in India HDFC Bank will enable seamless delivery of home loans and leverage on the large base of over 68 million customers of HDFC Bank and inter alia improve the pace of credit growth, the filing added.

"Post the combination, HDFC Bank's customers will be offered mortgages as a core product in a seamless manner. HDFC Bank will also leverage the long tenor mortgage relationship to offer varied credit and deposit products enabled through better insights through-out the customer life-cycle," it said.