Banking related general awareness -- Mergers and acquisitions
Discuss advantages and disadvantages of “mergers and acquisitions”
Globalisation of Indian economy has brought fierce competitive pressures on Indian banks from international banks. Size has therefore assumed critical importance with the virtual banking becoming part of Indian banking along with on going revolutions in information and communication technology, a perception that the branch net work of banks reflects its 8 strength is disputable. The Bank’s size is to be determined by the size of its balance sheet.
Mergers, acquisitions and strategic alliances are beginning to appear on the banking scene to share synergies, reduce cost of operations and increase market share. There are however legal and social constraints in this direction. World over, the approach of mergers, acquisitions and consolidation is growing momentum. The recent mergers/acquisitions of some of the mega banks in America and Japan illustrates the shape of things to come in Indian banking system. The merger of erstwhile New Bank of India with PNB a few year ago created problems. That
experience was not happy. Now Nedungadi Bank in Kerala is to be merged with PNB.
While mergers and acquisitions are good for the weaker organisations, there are board to be problems with the employees of the weaker and stronger organisations and because of the fear of career progression and related issues there is going to be unhappiness among the employees. This aspect will have to be kept in mind when we propose mergers and acquisitions.
source: www.iibf.org.in
Globalisation of Indian economy has brought fierce competitive pressures on Indian banks from international banks. Size has therefore assumed critical importance with the virtual banking becoming part of Indian banking along with on going revolutions in information and communication technology, a perception that the branch net work of banks reflects its 8 strength is disputable. The Bank’s size is to be determined by the size of its balance sheet.
Mergers, acquisitions and strategic alliances are beginning to appear on the banking scene to share synergies, reduce cost of operations and increase market share. There are however legal and social constraints in this direction. World over, the approach of mergers, acquisitions and consolidation is growing momentum. The recent mergers/acquisitions of some of the mega banks in America and Japan illustrates the shape of things to come in Indian banking system. The merger of erstwhile New Bank of India with PNB a few year ago created problems. That
experience was not happy. Now Nedungadi Bank in Kerala is to be merged with PNB.
While mergers and acquisitions are good for the weaker organisations, there are board to be problems with the employees of the weaker and stronger organisations and because of the fear of career progression and related issues there is going to be unhappiness among the employees. This aspect will have to be kept in mind when we propose mergers and acquisitions.
source: www.iibf.org.in
simply GREAT...!
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chinmay choudhury:
ReplyDeleteI suggest you visit iibf site every day and read updates. best wishes