india going global.indd - The IIPM Think Tank

More documents

Recommendations

Info

IN FOCUS Mergers and amalgamations are not new to the Indian banking system. However, it is pertinent to note that a majority of such mergers undertaken by public sector banks were backed more by because of political reasons than by commercial ones. The HDFC Bank-Times Bank merger, which became effective 26 February 2000, was the first market-led M&A Activity after Nationalisation of Indian Bank: 25 20 15 10 5 No. of M&As 0 1970-79 1980-89 1990-99 2000-07 Source : Banknet India merger on the Indian banking scene in recent times. The merger had quite a few firsts to it. For one, two new age private banks, both barely five years old, were joining hands. Two, the merging banks had reasonably similar profiles and the deal was settled through a share swap. The Trend of Acquisitions in Cooperative Banks in India is growing and one major reason for the same is the RBI restrictive policy on issuing branch licenses for co-operative banks. An important observation which may be induced from various past mergers is that a merger between big and small banks has led to greater gains as compared to a merger between equals. It is also observed from past experiences that if the merger follows business aided by appropriated technology and diversified product range, it could lead to greater gains for the banking industry as a whole. Similarly, consolidation increases the market power and does not cause any damage to the availability of services to small customers. Banks in India are gradually going for- 1) Consolidation of players through mergers and acquisitions, 2) Globalization of operations, 3) Development of new technology and 4) Universalisation of banking. Mergers and acquisitions invite litigation and at the same time involve substantial time and money for the parties involved. ”Strategic Business Alliance” although a new concept, promises a good alternative. A good example of this is the strategic alliance entered into by Corporation Bank, Oriental Bank of Commerce and Indian Bank in 2006 for sharing of information, IT infrastructure, Training, ATMs, Treasury, Loans etc. Consolidation would and is taking place not only in the structure of banks, but also in the area of services. For instance, some banks would like to shed their non-core business portfolios to others. This could see the emergence of niche players in different functional areas and business segments such as housing loans, cards, mutual funds, insurance, sharing of their infrastructure including ATM Network, etc. Structure and ownership pattern would undergo changes. There would be greater presence of international players in the Indian financial system. Similarly, some of the Indian banks would become global players. According to Indian Bank’s Association Banking Industry Vision 2010, mergers and acquisitions would gather momentum as managements strive to meet the expectations of stakeholders. This could see the emergence of 4-5 world class Indian Banks. As banks seek niche areas, we could see emergence of some national banks of global scale and a number of regional players. Global banks are jostling to gain a foothold in the Indian market as the $1 trillion economy is continuing to grow at a brisk pace offering enormous opportunities. All of them want to party in the world’s fastest growing banking market. According to PricewaterhouseCoopers, India could emerge as the third largest domestic banking market in the world by 2040 and, in the long run, could grow faster than China. Mergers and acquisitions in the banking sector are going to be the order of the day. India is slowly but surely moving from a regime of `large number of small banks’ to `small number of large banks’. The new era in banking in India is going to be one of consolidation around identified core competencies. Reference: Banknet’s Handbook on M&A in Indian Banking System- Second Edition July 2007. Banknet’s Handbook on M&A is a comprehensive guide to bank mergers & acquisitions in India. It covers Indian banking structure, Bank mergers in India since 1961, Essentials of M&A, Indian legal framework, Procedure, Guidelines for bank mergers, RBI’s review process, Accounting, Taxation & Valuation, Case studies and much more. ** Banknet Group, promoted and managed by senior bankers is focused on disseminating banking and financial information through online, offline, print and mass media. BanknetIndia.com is ranked among the Top 25 banking sites and Top 20 banking technology sites and resources online in the world. Banknet Conferences are one of the largest organizers of highly focused and topical banking conferences, seminars in India. Banknet Publications are based on extensive industry research, surveys and interactions with practicing industry professionals. 44 Need the Dough July-October - 2007
P LANMAN TECHNOLOGIES KNOWLEDGE . IT . OUTSOURCING P LANMAN FINANCIAL INVESTMENT BANKING . CORPORATE ADVISORY P LANMAN CONSULTING GLOBAL STRATEGY . HUMAN RESOURCE . MARKET INTELLIGENCE P LANMAN MARCOM ADVERTISING . BRANDING . PR & CRM . ACTIVATION o 360 Business Growth Consulting WWW. PLANMANCONSULTING. COM PLANMAN IS PERHAPS THE ONLY GLOBAL CONSULTING FIRM THAT CAN GIVE YOUR ORGANISATION A 360 O BUSINESS GROWTH CONSULTING THROUGH IT’ S 360 O CAPABILITIES. FOR US CONSULTING DOES NOT ONLY MEAN MECHANICAL COST REDUCTION THROUGH BETTER I.T. APPLICATIONS. WE FIND OUT WHAT YOUR ORGANISATION REALLY NEEDS AND GIVE YOU AN INTELLECTUAL SOLUTION THAT HELPS YOU REDUCE COSTS AS WELL AS HELPS YOUR BUSINESS GROW AND BEAT THE COMPETITION. TO BEAT THE COMPETITION E-MAIL TO growth@planmanconsulting.com NOW!! OUR CONSULTANTS WILL GET BACK TO YOU IN 24 HOURS AND PUT YOU INTO THE HIGH GROWTH PATH! Planman. Beat The Competition. PLANMAN MARCOM/336 ASIA | EUROPE | AMERICA
Page 1: IIPM Planman Hyderabad Campus New D
Page 4 and 5: M A K E W E A L T H W H I L E O T H
Page 6 and 7: Editor’s Page Dear reader, Prasoo
Page 8 and 9: PANORAMA A“M&A”ZING INDIA 8
Page 10 and 11: PANORAMA The year gone by has seen
Page 12 and 13: PANORAMA MERGERS AND ACQUISITIONS :
Page 14 and 15: PANORAMA the Public Announcement, i
Page 16 and 17: PANORAMA DERIVATIVES A Critical Ass
Page 18 and 19: PANORAMA Competitive impact: This f
Page 20 and 21: GLOBAL PERSPECTIVE A BIG RICH INDIA
Page 22 and 23: PANORAMA a patriarchal system, whic
Page 24 and 25: TRENDS Jet Airways - Air Sahara mer
Page 26 and 27: TRENDS report stated that the gover
Page 28 and 29: TRENDS THE SURGING TSUNAMI - MERGER
Page 30 and 31: TRENDS established giants of the in
Page 32: TRENDS The FII funds inflow for the
Page 35 and 36: MERGERS & ACQUISITIONS The golden b
Page 37 and 38: MERGERS & ACQUISITIONS effect on th
Page 39 and 40: MERGERS & ACQUISITIONS Ltd, tractor
Page 41 and 42: MERGERS & ACQUISITIONS sector worth
Page 43: MERGERS & ACQUISITIONS Consolida
Page 47 and 48: MERGERS & ACQUISITIONS Baffled Cons
Page 49 and 50: MERGERS & ACQUISITIONS or unlisted.
Page 51 and 52: MERGERS & ACQUISITIONS company, cou
Page 53 and 54: MERGERS & ACQUISITIONS Introduct
Page 55 and 56: MERGERS & ACQUISITIONS ing, rather
Page 57 and 58: MERGERS & ACQUISITIONS capital and
Page 59 and 60: MERGERS & ACQUISITIONS The Value Of
Page 61 and 62: RESEARCH βQ = 0. (12) Finally, a C
Page 63 and 64: RESEARCH Tabel 3 Test of Structural
Page 65 and 66: MERGERS & ACQUISITIONS The Main Ide
Page 67 and 68: MERGERS & ACQUISITIONS D) Multinati
Page 69 and 70: I.T. = Business Growth At Planman T
Page 71 and 72: MERGERS & ACQUISITIONS An abundance
Page 73 and 74: MERGERS & ACQUISITIONS ber 2006, Qa
Page 75 and 76: MERGERS & ACQUISITIONS Kravis Rober
Page 77 and 78: MERGERS & ACQUISITIONS percent abov
Page 79 and 80: MERGERS & ACQUISITIONS The Current
Page 82 and 83: D A R E T O D R E A M : S T R A T E

india going global.indd - The IIPM Think Tank

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?