Mergers and Acquisitions
Executive Summary
In the recent past, the Indian banking system has been undergoing major changes that have affected both its structure and the nature of strategic interaction among banking institutions. Different strategies have been adopted to tackle the demands of this new operating environment, one such strategy having been consolidation via mergers and acquisitions. The Government and the Reserve Bank of India are in favor of this change and consequently arises a desire to study this aspect in detail. Considering the maturity of certain international markets an attempt would be made to obtain certain practices from them as well. However the report takes cognizance of the fact that Mergers and Acquisitions (M&A) is highly environment dependant and hence there is a constant focus on this aspect while pertaining to practices. It is observed that the banking industry is moving from traditional savings-cum-lending functions to other services as well such as Bank-assurance and securities trading. In recent times, banks have also diversified their activities to cover a wide range of activities. They arrange remittance of funds from one place to another, they act as agent of their customers in certain activities like payment of subscription, and they also act as guarantors for their customers. Thus banks in India need to change in form and structure so as to adapt to meet these changing scenarios of being a total financial services provider and for this a preferred route ought to be inorganic growth due to time advantages and hence mergers and acquisitions for consolidation.
In the recent times, there have been numerous reports in the media on the Indian Banking Industry. Reports have been on a variety of topics. Reports from the Istern markets of increased M&A activity have also aroused a deep sense of keenness in the authors to compare the various aspects of M&A in the Banking sector in India and the international arena.
This study analyses mergers in
In the recent past, the Indian banking system has been undergoing major changes that have affected both its structure and the nature of strategic interaction among banking institutions. Different strategies have been adopted to tackle the demands of this new operating environment, one such strategy having been consolidation via mergers and acquisitions. The Government and the Reserve Bank of India are in favor of this change and consequently arises a desire to study this aspect in detail. Considering the maturity of certain international markets an attempt would be made to obtain certain practices from them as well. However the report takes cognizance of the fact that Mergers and Acquisitions (M&A) is highly environment dependant and hence there is a constant focus on this aspect while pertaining to practices. It is observed that the banking industry is moving from traditional savings-cum-lending functions to other services as well such as Bank-assurance and securities trading. In recent times, banks have also diversified their activities to cover a wide range of activities. They arrange remittance of funds from one place to another, they act as agent of their customers in certain activities like payment of subscription, and they also act as guarantors for their customers. Thus banks in India need to change in form and structure so as to adapt to meet these changing scenarios of being a total financial services provider and for this a preferred route ought to be inorganic growth due to time advantages and hence mergers and acquisitions for consolidation.
In the recent times, there have been numerous reports in the media on the Indian Banking Industry. Reports have been on a variety of topics. Reports from the Istern markets of increased M&A activity have also aroused a deep sense of keenness in the authors to compare the various aspects of M&A in the Banking sector in India and the international arena.
This study analyses mergers in