The Hindu Business Line : `Merger among PSBs on voluntary basis'

The Government is designing a policy which would empower the board of directors of the banking system to take independent decisions and then come to Government for approval, Mr Vinod Rai, Additional Secretary in the Finance Ministry, said while speaking at a conference on `Mergers and Acquisition' organised by the Associated Chambers of Commerce and Industry (Assocham).

"India's State-run banks will combine with one another on a voluntary basis. The entire process has no element of compulsion or being Government driven. There is no question of behind the back puppeteering. It will all be board driven," he said.

Mr Rai, without giving further details, said that the Chairmen of some banks are in a merger dialogue.

Commenting on the future merger policy of the Government, the Additional Secretary made it amply clear that the "Government does not intend to create another behemoth like the State Bank of India by encouraging consolidation of several bank entities into one. What the Government is wanting to encourage is merger and acquisition that can take on future competition and sustain for survival".

He added that besides synergies between partners, banks need to see how they can dove-tail the core competencies of each other and then go to their respective boards.

Meanwhile, in his address, the Assocham President, Mr M.K. Sanghi, said that Indian companies were opting for the M&A route due to various reasons such as opportunity for faster growth, gaining complementary skills, acquiring new customers, enhancing skill sets, expanding into new areas and meeting end-to-end solution needs.

Successful entry into new products and into new geographical markets by a firm may require M&As at some stage in the firm's development, he added.

More Stories on : Mergers & Acquisitions | Public Sector Banks

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Volumes swell in CBLO market

Rupee slides; bonds rally

Rupee sheds 58 paise; securities buoyant

Zylog to market Singapore firm's banking software

Scheme for Development Officers — Govt not to interfere in LIC's decision

Tata AIG eyes 20 pc market share by `07

General insurance employees to strike work on Dec 21

TMB hikes deposit rates

Oriental Bank chief sees drop in profits on GTB merger

`Corporation Bank, a laboratory for innovative banking'

HC says no simultaneous action under Securitisation Act, DRT

`Merger among PSBs on voluntary basis'

New office-bearers for Canana Bank Union

Chopra takes charge as Corpn Bank CMD