Journal Press India^®

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The Government of India, the owner of private sector banks, has expressed its concern for strengthening these banks through selective M&A in Indian Banking sector. Consolidation of the banking sector, it is presumed, is required to improve financial & operational efficiency and to facilitate the emergence of globally competitive Indian banks. Indian Private sector Banking will have to explore inorganic growth options in order to 'Significant challenges emanating from large sized foreign banks to be known for their deep pockets, advanced technology and skilled personnel. M&A activities in Indian Private Banking Sector have started greatly after 2003 when the heat of competition mounted and the Basel II norms were implemented. Basel II norm, which requires banks to maintain a minimum of 9% Capital Adequacy Ratio (CAR). forced the banking sector to look for consolidation of smafier and weaker banks with larger banks. Indian banks also started hunting for M & A. This equation is specifically applicable to M&A in Indian Private Sector Banking. The key principle behind buying a bank is to create shareholder value over and above that of the sum of the two merged bank it results in financial and operational synergy for acquiring bank. In this paper highlighting the financial and operational performance of Nedungadi Bank Ltd.& Punjab National Bank Ltd. that is acquiring bank in Indian Private Sector Banking.

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