Merger and Acquisition Act to bring major shift
Kolkata, Aug 31: The much-talked about Merger and Acquisition Act of Public sector banks, which is awating the Presidential assent for implementation, will bring about a paradigm shift in the Indian Banking sector in terms of its globalisation effort, said Mr Vinod Rai, Special Secretary (Finanacial Sector), Union Minisitry of Finance.
Speaking to sources after participating in a function organised by the United Bank of India(UBI) here today,Mr Rai said in the backdrop of steep competiton among public sector banks to go global the Act would play a dominant role in allowing them to become larger both in size and volume through calculated mergers and acquisitions within the sector.
Stating that the necessary nod from President APJ Abdul Kalam was forthcoming by next month to make the Act useful after it had been passed by both houses of Parliament earlier this year, Mr Rai said a number of amendments had been incorporated in the Act during two days of discussions on the floor of the august house to make it more useful by all means.
Regarding the Union Finance Ministry's plan to wrap up the hugely loss making Industrial Investment Bank of India(IIBI),Mr Rai said though the plan was under "active consideration" of the government, no final decision had yet been taken in this regard.
He, however, refused to elaborate on the issue further.
He said in the event of the Merger and Acquisition Act coming into being, a number of pending proposals in this regard would be finalised thereby opening a new window of opportunity for aggressive Indian public sector banks to compete in the global arena on a firm foot.
Mergers and acquisitions with like-minded institutions would also help them spread their wings overseas in a more dominant manner, he explained.
UBI Chairman and Managing Drector P K Gupta was also present along with the Bank's Executive Director Sunanada Lahiri.