Mergers and acquisitions in the Indian Banking Sector

The aim of this paper is to probe into the various motivations for mergers and acquisitions in the Indian Banking sector. India is slowly but surely moving from a regime of large number of small banks’ to ‘small number of large banks’. Like all business entities, banks want to safeguard against risks, as well as exploit available opportunities indicated by existing and expected trends. Mergers &Acquisitions in the banking sector have been on the rise in the recent past, both globally and in India. The fast growing domestic economy, a climate conducive to investment and easy financing have caused an increase in the mergers and acquisitions. This paper seeks to explain the motives behind some Mergers &Acquisitions that have occurred in India post- 2000, analyze the benefits and costs to both parties involved and the consequences for the merged entity.

This paper also seeks to explain the motives behind some Mergers &Acquisitions that have occurred in India, analyze the benefits and costs to both parties involved and the consequences for the merged entity. A look at the future of the Indian banking sector, and some key recommendations for banks, follow from this analysis.