Journal Press India^®

Author Details ( * ) denotes Corresponding author

Of late, the Government of India constituted a ministerial panel for finalising alternative mechanism for consolidation of public sector banks in India with a motto to create large banks for meeting the credit needs of the growing Indian economy and building capacity in the PSB space to raise resources. The very objective behind the move of mergers of PSB seems to make them financially stronger to enable them to emerge, few of them, at the global level. The governance of these banks also assumes significance. The present study aims to explore underlying reasons for mergers and acquisitions of public sector banks in India. The motivation for pursuing present research is to explore certain challenges faced by Indian banks responsible for the present status. The study also aims to assess certain issues from governance point of view that favours the mergers and acquisitions. For ascertaining the financial stability of these banks, Banks’ stability indicator (BSI) variables grounded on construct of soundness, assets-quality, liquidity, profitability and efficiency with measurement scale of ratio scale. The analysis of all public sector banks has been undertaken to extract the output with the help of statistical tool (SPSS). Further, statistical tests have been used according to nature and scale of the study. The output of the study indicates assets and profitability underlying variables are responsible for likely mergers and acquisition of bank.

Keywords

Assets quality, Efficiency, profitability, liquidity, Bank performance and corporate governance.

1. D P Samantaray and S Panda(2008), "Corporate Governance in Indian Banking Industry:An Experience with SBI and HDFC Bank” case study, The Icfai University Press.
2. H pandaya (2011), “Corporate Governance Structures and Financial Performance of Selected Indian Banks”, Journal of Management & Public Policy, Vol. 2, No. 2, issue. June
3. J kadrac (2014), “Bank Failure, Relationship Lending, and Local Economic Performance”, working paper.
4. Khan, A. A. (2011) ‘Mergers and acquisitions in the Indian banking sector in post liberalization regime’, International Business of Contemporary business studies, vol. 2, no. 11, November.
5. KV kamath, SS Kohli et all (2003), “Indian banking sector-challenges and opportunities “, Vol. 28, , no. 3, July-September.
6. Manoj, P. K. (2010) ‘financial soundness of old private sector bank (OPSs) in India and Benchmarking the Kerala Based OPSs: A Camel Approach’, American Journal of Scientific Research, Issue. 11, pp. 132-149, ISSN 1450-223X.
7. R Seenevasan (2014) “Corporate Governance Issues in Banks in India”, Journal of Business Law and Ethics, June 2014, Vol. 2, No. 1, pp. 91-101
8. Tariq, M., Hassan, S. Y. and Zaheer, A. (2011) ‘which bank to acquire? Consolidation of banks in Pakistani Scenario’, Interdisciplinary Journal of Contemporary Research in Business, vol. 2, no. 11, March
9. http://www.livemint.com/Opinion/dusnp3sc9x S6SA9EpI19pO/Improving-governance-in-banks. html (accessed on 6/9/2017)
10. http://www.livemint.com/Opinion/dusnp3sc 9xS6SA9EpI19pO/Improving-governance-in- banks.html (accessed on 6/92017)
11. http://www.businesstoday.in/current/economy- politics/govt-sets-up-jaitley-led-panel-on-psu-bank- mergers/story/262888.html (accessed on 18/9/ 2017)
12. http://www.jagranjosh.com/current-affairs/union- government- constitutes- arun- ja i t l ey- l ed- committee- to- oversee- psu- bank- mergers- 1509509668-1 (accessed on 29/8/2017)
13. https:// economictimes. i ndiatimes. com/ industry/banking/finance/banking/government- searches-for-merger-can (accessed on 2/09/2017)
14. https://www.telegraphindia.com/1171007/ jsp/business/story_176607.jsp didates-among- public-sector-banks/articleshow/61013429.cms (accessed on 15/09/2017)
15. http:// indianexpress. com/ article/ business/ banking-and-finance/bank-recapitalisation-rbi- urjit-patel-indian-economy-narendra-modi-arun- jaitley-4914655/ (accessed on 2/09/17)