A STUDY ON NATURE AND SCOPE OF MERGER

Mergers and Acquisition are not unknown phenomena in Indian Banking. It started way back in 1920 when the Imperial Bank of India was born out of three presidency banks and several Mergers and Acquisitions (M&A) activities were reported in pre-independence period. In 1949, proper regulation was passed by the regulator to control the banking activities which provided a relief to investors and improved the depositor confidence in the banking system.  The first half of the sixties witnessed 45 forced mergers under Section 45 of Banking & Regulation Act. Interestingly, all the M&A activities were of failed private banks with one of the public sector banks. After 1980, the consolidation fever started in both commercial and rural banks. Historically, mergers and acquisitions activity started way back in 1920 when the Imperial Bank of India was born when three presidency banks (Bank of Bengal, Bank of Bombay and Bank of Madras) were reorganized to form a single banking entity, which was subsequently known as State Bank of India.

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