The merger and acquisitions (M&As) in the banking sector is set to get tougher as government may now make it compulsary to secure the approval of both fair market watchdog—the Competition Commission of India (CCI) and sectoral regulator--the Reserve Bank of India.
A media report said that government may amend the CCI Act to make even voluntary M&As seek approval from RBI and CCI, unlike the current practice when only involuntary deals go to the central bank along with CCI.While CCI will see the competition part of the deals, the RBI will be responsible for prudential aspects, said the report.
However, some experts have also expressed concerns over the proposed amendment that the co-existence of both the regulators might be difficult and in case of any conflict between the bodies, CCI will have a clear say in mergers and acquisitions across sectors including banking.
Earlier, Banking Laws (Amendment) Bill, 2011 had proposed that mergers and acquisition in the banking sector would be exempted from the purview of CCI. Post-amendment, the clause may be either taken away or suitably amended, said experts.