Govt plans new norms to spur banking M&As

BANGALORE: The Centre would soon unveil new policy guidelines for encouraging mergers and acquisitions (M&As) in the banking sector, Union minister of state Prithviraj Chavan said.

Speaking at a conference on ‘Global Banking Paradigm Shifts’, organised by the Federation of Indian Chambers of Commerce and Industry (Ficci) here, Mr Chavan said, “While the government will not force mergers and acquisitions, certainly we will encourage them.�

“M&As will encourage banks to gain global reach and better synergy, and allow large banks to acquire the stressed assets of weaker banks. Policy decision will be announced in time to come,� he said.

Observing that the present global banking required a smaller number of very large banks in contrast to the large number of small banks in the Indian context, Mr Chavan said, “This will require M&A activities on a large scale.�

He said the public sector banks would have to raise capital in the financial market and the current ownership norms with respect to the PSU banks would have to be relaxed.