Mergers and acquisitions of banks in India impact on cost efficiency and financial performance for banks in post liberalization era.

economic administration and financial management

Mergers and acquisitions (M&A) are the joining of two or more businesses into one, often funded with cash, equity, or a mix of the two. Takeovers are when one person, a group of people, or both make a transaction, either directly or indirectly. Centric mergers serve the same customers in the same sector and provide complementary products and services. Consolidrative mergers involve a union of two businesses that operate in entirely unrelated industries. Co-generative mergers involve two companies that provide distinct goods within the same sector of business and take advantage of overlapping technologies, parallel distribution networks, or related production techniques.Triangular mergers involve combining with a division of the acquiring corporation in a three-way agreement. E-governance is a helpful tool in achieving the aim of speed, and legally binding mergers may be accorded statutory acceptance in India under the Company Law. This research investigated the concept and practice of M&A and made suggestions to improve cthe financial performance and cost efficiency of Indian banks. Secondary data showed that ICICI Bank Ltd. and HDFC Bank Ltd. saw a considerable increase during the post-M&A activity period, while Kotak Mahindra Bank Ltd. experienced a decrease. Reasons for persistent EPS include cutting back on unnecessary expenditures, focusing on more recent profitable goods, and enhancing corporate governance. Mergers and acquisitions should not be used by the government to help weaker banks, as their asset quality would decline.

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