HDFC Bank could see drop in cost of funds post merger with parent HDFC Ltd: Bernstein

“On cost of funds the level of impact depends on the extent to which the borrowings are replaced by term deposits,” said Pranav Gundlapalle, senior research analyst, Bernstein. The cost of the liabilities used to replace HDFC Limited's borrowings — would drive a slightly lower cost of borrowings versus while replacing borrowings with term deposits will further lower the cost of funds.