Bank merger pdf

Mergers and Acquisition is a useful tool for the growth and expansion in any Industry and the Indian Banking Sector is no exception. It is helpful for the survival of the weak banks by merging into the larger bank. This study shows the impact of Mergers and Acquisitions in the Indian Banking sector and two cases have been taken for the study as sample to examine the as to whether the merger has led to a profitable situation or not.

In case 1, ICICI Bank Net Profit and Return on Assets have showed an improvement after the merger but in case of the other parameters there is no significant improvement in the performance. In case 2, SBI , there is no significant improvement in the performance after the merger as the merger was mainly in the interest of the public. In the initial stage, after merging, there may not be a significant improvement due to teething problems but later they may improve upon. Key words: Mergers.

In this scenario, Mergers and Acquisitions is one of the widely used strategies by the banks to strengthen and maintain their position in the market. Companies are confronted with the facts that the only big players can survive as there is a cut throat competition in the market and the success of the merger depends on how well the two companies integrate themselves in carrying out day to day operations.

Banks will get the benefits of economies of scale through mergers and acquisition. For expanding the operations and cutting costs, Business Entrepreneur and Banking Sector is using mergers and acquisitions world wide as a strategy for achieving larger size, increased market share, faster growth, and synergy for becoming more competitive through economies of scale.

A Merger is a combination of two or more companies into one company or it may be in the form of one or more companies being merged into the existing companies. On the other hand, when one company takes over another company and clearly well known itself as the new owner, this is called as Acquisition. Mergers and acquisitions is not a short term process, it takes time to take decisions after examining all the aspects.

Indian Corporate Sector had stringent control before liberalization but, the Government has initiated the Reform after which resulted in the adaptation of the different growth and expansion strategies by the Companies.

In the recent times, Indian Banking Industry showed a tremendous growth because of an increase in the retail credit demand, proliferation of ATMs and debit cards, decreasing NPAs, improved macro economic conditions, diversification, interest rate spreads and regulatory and policy changes. A firm can achieve growth both internally and externally. Goyal K. The need of Merger and Acquisition in India has been examined under this study. S in their paper, they assessed the strategic and financial similarities of merged Banks, and relevant financial variables of respective Banks were considered to assess their relatedness.

The result of the study found that only private sector banks are in favor of the voluntary merger wave in the Indian Banking Sector and public sector Bank are reluctant toward their type of restructuring. Target Banks are more leverage dissimilarity than bidder Banks, so the merger lead to attain optimum capital Structure for the bidders and asset quality of target firms is very poor except the cases of the HDFC Vs the CBOP merger in The merging partners strategically similarities and relatedness are very important in the synergy creation because the relatedness of the strategic variable have a significant impact on the Bank performance and the effect of merger on the stock market.

Aharon David Y et al. Merger of banks through consolidation is the significant force of change took place in the Indian Banking sector. Kuriakose Sony et al. Schiereck Dirk et al. This study considered European merger and Acquisition transaction announced between and and finds that on average wealth not significantly effect by Merger and Acquisitions. It is found in the study of Bhaskar A Uday et al. It described that the acquiring firms mainly focuses on the economies of scale, efficiency gain and address the need of communication and employee concern, and described the integration process was handled by professional and joint integration committee.

This study regulate the link between communication, HR integration, management action and consequent contribution of post merger success by conducted interview in a recent bank merger, in depth interviews work conducted in a recent mergers of a Indian Bank.

It was inferred that proactive communication, changes in organizational structure, and appropriate human resource integration would smoothen the journey towards successful integration. They selected all mergers involved in public limited and traded companies in India between and , result suggested that there were little variation in terms of impact as operating performance after mergers. In different industries in India particularly banking and finance industry had a slightly positive impact of profitability on pharmaceutical, textiles and electrical equipments sector and showed the marginal negative impact on operative performance.

Some of the industries had a significant decline both in terms of profitability and return on investment and assets after merger. The study will also discuss the pre and the post merger performance of banks. The financial and accounting data of banks is collected from the Annual report of the select Banks to examine the impact of Mergers and Acquisitions on the performance of the sample banks.

The year of merger was considered as a base year. H0 Null Hypothesis — There is no significant difference between the pre and post merger Return on Capital Employed H1 Alternative Hypothesis - There is a significant difference between the pre and post merger Return on Capital Employed 4.

H0 Null Hypothesis — There is no significant difference between the pre and post merger Return on Equity H1 Alternative Hypothesis - There is a significant difference between the pre and post merger Return on Equity 5. Here you can check the list of bank mergers in India details completely. Although the buying firm may be a considerably different organization after the merger, it retains its original identity. There are high chances that in the exam, you can expect questions from the list of bank mergers in India.

Section 44A of the Banking Regulation Act of , which states that no banking companies shall amalgamate unless a scheme of such amalgamation is required to be approved by a two-thirds majority of shareholders of each amalgamating company.

Check the aim, merits, demerits, and more info regarding the list of bank mergers in India. Here is the list of bank mergers in India in the table.

You can use it for competitive exam preparations. Bank Merging conversations have consequently talked by our finance ministry from a few months before. Meanwhile, the expenses have overtaken the desired revenue for a lot of banks.

In order to avoid bankruptcy, our union cabinet has planned to merge our public sector banks. The merger is important for consolidation and expansion purposes.

Mergers have provided great results in terms of saving the weak banks which are going to be crucial in meeting their expectations. Along with that, it will rationalize some important parameters like expenses including branches, employees, technology, etc. To consult the above points with our top banking higher officials our Union cabinet Finance Minister Nirmala Sitharaman said the exercise of consolidation of 10 public sector banks PSBs into a large four state-owned banks is ahead and the merger will come into effect from 1 April The Union Cabinet has given a go-ahead for the merger proposal and the government has been in regular touch with these banks.

Now it will be seven large public sector banks PSBs , and five smaller ones. The merger would result in the formation of seven large Public Sector Banks with each merged entity having a business of over Rs 8 lakh crore. Greater scale and cooperation through the merging would lead to cost benefits which should enable the Public Sector Banks to strengthen their competitiveness and provides a positive impact on our Indian banking system.

Sitharaman said, By the amalgamation of Dena Bank and Vijaya Bank with Bank of Baroda, the operating profit has improved and retail loans are now sanctioned from 23 days into 11 days. Sign in. Log into your account. Password recovery. Forgot your password? Get help. To merge their power and control over the markets. Decrease of risk using innovative techniques of managing financial risk.

Tax Benefits More Profits enables more research and development Economies of scale- bigger firms more efficient List of Bank Mergers in India — Demerits: An increase in costs might result if the right management of modification and also the implementation of the merger and acquisition dealing are delayed.

Loss of experienced workers aside from workers in leadership positions. This kind of loss inevitably involves loss of business understand and on the other hand that will be worrying to exchange or will exclusively get replaced at a nice value.

These are the demerits of bank mergers in India. Times Bank Ltd. Cabinet Approval on List of Bank Mergers in India: To consult the above points with our top banking higher officials our Union cabinet Finance Minister Nirmala Sitharaman said the exercise of consolidation of 10 public sector banks PSBs into a large four state-owned banks is ahead and the merger will come into effect from 1 April Aim of Bank Merger Plan: The merger would result in the formation of seven large Public Sector Banks with each merged entity having a business of over Rs 8 lakh crore.

Q: What are the 12 banks after merger? It is a private sector bank. Inline Feedbacks. View Comments. Load More Comments. Contact — [email protected]. State Bank of India. Bank of Bihar Ltd.