Negotiations between Mitsubishi UFJ Financial Group (NYSE:MUFG) and HDFC Bank (NYSE:HDB) regarding a potential minority stake in HDFC's consumer lending division, HDB Financial Services, are reportedly facing hurdles.

Sources close to the matter indicate that the discussions are stalling due to disagreements over the extent of influence MUFG would have over the unit's strategic direction.

Despite the impasse, MUFG remains interested in acquiring a stake in HDB Financial Services. However, the talks may experience further delays or could potentially collapse if a resolution is not reached.

According to one insider, HDFC Bank might consider an alternative route of conducting an initial public offering for its consumer lending arm if the negotiations with MUFG falter.

As of now, no definitive decisions have been made, and there is still a possibility that the talks could resume successfully if MUFG is assured a significant role in shaping the business strategy of HDB Financial Services.