Biometrics
Consolidation in the Banking Industry through Mergers and Acquisitions
Banking scenario since 1991 has been a process of transformation and consolidation. With financial sector reforms implementation, the microenvironment of banking sector has undergone a radical change. Almost all insulations to commercial banking have been peeled off and it has been susceptible to all types of exposures now. There has been paradigm shift in operational, functional, environmental, technological spheres. The reforms emphasised the "commercial character" of the banking system and helped the banks to stand on a firm footing. The first phase of reforms directed mainly towards the operational efficiency has brought concepts like prudential accounting norms, Deregulation of Interest Rates, Credit Delivery, Transparency, Capital Adequacy Norms, Autonomy in Management etc. Banks started cleansing their balance sheets, competition led to improvement in their efficiencies and profit concept being recognised as a test of commercial viability. The transparency made them to realise their own strengths.
In today's world, banking structures are important and size does
matter, however beautiful "small" may be. Consolidation is an
inevitable process in the banking sector as banks seek to reap
economies of size. Mergers and Acquisitions are considered
useful to achieve the requisite size in the short run.
Dr. P. Lakshminarayan is presently Chairperson of Indian Institute of Bankers, Nagpur Centre, Secretary of Indian Institute of Public Administration,
Nagpur and Bankers' Club, Nagpur and also Vice President of South India Association, Nagpur. Besides the above, he is Associate Member of Indian
Insitute of Bankes, Life Member of South Indian Education Society, Nagpur, Examiner for M.A. Final Exams. of Nagpur University and for JAAIB/CAIIB
Exams. consucted by I.I.B.F.
Dr. Lakshminarayan has worked in Reserve...
Please login to view the full essay...