Banking sector reforms in India are in the progress. Both Finance Ministry of India and Reserve Bank of India (RBI) are actively suggesting many far reaching reforms for banking and financial industry of India.One of such reforms pertains to regulating mergers and acquisitions (M&A) pertaining to banking sector. Till now the Competition Commission of India (CCI) has a say in the M&A pertaining to banking companies.
However, with the recent proposed amendments in the Banking Regulations Act, 1949, only RBI would have power to regulate M&A pertaining to banking sector. In fact, the proposed amendments have already been approved by Cabinet of India.
Finance Minister Pranab Mukherjee has also recently said that RBI would have the final say on bank M&A. He told that banking mergers and acquisitions will not come under the purview of the Competition Act or the Companies Act.
The mergers and acquisitions of banks will now come under the purview of the Banking Regulation Act. This means M&A in banking sector would no more require the approval of the Competition Commission of India.
