...Implications of M&As of Banking sector on Indian economy Author Author Shilpa Vivek Agrawal Shreya Deepak Saraf Novel Institute of Management Studies, Novel Institute of Management Studies Chinchwad, Pune. India. Chinchwad, Pune. India. Co-Author Dr. D.M Gujarathi Chairman BOS, Cost and Works Accounting University of Pune, India --------------------------------------------------------------------------------------------------------------------- Abstract Financial System is the most important institutional and functional vehicle for economic transformation of any country. India is slowly but surely moving from a regime of 'large number of small banks' to 'small number of large banks. The process of mergers and acquisitions has gained substantial importance in today's corporate world. This process is extensively used for restructuring the business organizations. In India, the concept of mergers and acquisitions was initiated by the government bodies. M & A in banking sector have been on rise in recent past both globally & in India. With the help of mergers and acquisitions in the banking sector, the banks can achieve significant growth...
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...ABSTRACT Recent reports on banking sector often indicate that India is slowly but surely moving from a regime of `large number of small banks' to `small number of large banks'. The aim of this paper is to probe into the various motivations for mergers and acquisitions in the Indian Banking sector. Thus, literature is reviewed to look into the various motivations behind a banks’ merger/ acquisition event. The paper also takes us through the international mergers & acquisitions scenario comparing it with the Indian scene. Given the increasing role of the economic power in the turf war of nations, the paper looks at the significant role of the state and the central bank in protecting customer’s interests vis-à-vis creating players of international size. While, gazing at the mergers & acquisitions in the Indian Banking Sector both from an opportunity and as imperative perspectives, the paper also glances at the large implications for the nation. INTRODUCTION Generally speaking a bank is an institution dealing in money. The origin of the word bank is traced to the Italian ‘banca’, ‘banc’ or ‘banque’, which means a bench. It is stated that in Middle Ages the European money changers and moneylenders displayed their coins on their benches and conducted their business. Hence the term bank refers to the bench on which the business of money changing and money lending was conducted. Hence, the term banking is defined as accepting for the purpose of lending or investment, of...
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...INTERNATIONAL REVIEW Mathew et al. (2005) analyzed the use of banking technology in United Kingdom by ranking of importance of selected technology on consumer perception of service delivery performance and found that the importance-performance grid demonstrates two factors and their underlying attributes that fall into the “Keep up the good work” quadrant and the other two factors fall into the “Low priority” quadrant. The first two were the areas the organization needs to allocate resources in order to maintain the level of service they provided...
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...International Journal of Contemporary Business Studies Vol: 2, No: 11. November, 2011 ISSN 2156-7506 Available online at http://www.akpinsight.webs.com Merger and Acquisitions (M&As) in the Indian Banking Sector in Post Liberalization Regime Dept. of Commerce, AMU, Aligarh India Azeem Ahmad Khan ABSTRACT The purpose of this paper is to explore various motivations of Merger and Acquisitions in the Indian banking sector. This includes the various aspects of banking Industry’s Merger and Acquisitions. It also compares pre and post merger financial performance of merged banks with the help of financial parameters like Gross-Profit Margin, Net- Profit Margin, Operating Profit Margin, Return on Capital Employed (ROCE), Return on Equity (ROE) and Debt-Equity Ratio. Through literature review it comes to know that most of the work done high lightened the impact of Merger and Acquisitions on different aspects of the companies. The data of Merger and Acquisitions since economic liberalization are collected for a set of various financial parameters. This study also examines the changes occurring in the acquiring firms on the basis of financial ground and also the overall impact of Merger and acquisitions (M&As) on acquiring banks. The Researcher used independent t-test for testing the statistical significance and this test is applied not only for the ratio analysis but also to test the effect of Merger and Acquisitions on the performance of banks. This performance is being tested...
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...India Banking 2010 Towards a High-performing Sector India Banking 2010 Executive Summary The last decade has seen many positive developments in the Indian banking sector. The policy makers, which comprise the Reserve Bank of India (RBI), Ministry of Finance and related government and financial sector regulatory entities, have made several notable efforts to improve regulation in the sector. The sector now compares favourably with banking sectors in the region on metrics like growth, profitability and non-performing assets (NPAs). A few banks have established an outstanding track record of innovation, growth and value creation. This is reflected in their market valuation. However, improved regulations, innovation, growth and value creation in the sector remain limited to a small part of it. The cost of banking intermediation in India is higher and bank penetration is far lower than in other markets. India’s banking industry must strengthen itself significantly if it has to support the modern and vibrant economy which India aspires to be. While the onus for this change lies mainly with bank managements, an enabling policy and regulatory framework will also be critical to their success. The failure to respond to changing market realities has stunted the development of the financial sector in many developing countries. A weak banking structure has been unable to fuel continued growth, which has harmed the long-term health of their economies. In this “white paper”, we emphasise...
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...This article was downloaded by: [University of Glasgow] On: 06 August 2013, At: 08:28 Publisher: Routledge Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK Journal of Transnational Management Publication details, including instructions for authors and subscription information: http://www.tandfonline.com/loi/wtnm20 Diversification, Strategy, and Stability of Lebanese Banks: A Non-Parametric DEA Approach Rock-Antoine Mehanna & Youssef Yazbeck a b a b Sagesse University, Furn el Shebak, Lebanon Saint Joseph University, Beirut, Lebanon Published online: 14 Jun 2012. To cite this article: Rock-Antoine Mehanna & Youssef Yazbeck (2012) Diversification, Strategy, and Stability of Lebanese Banks: A Non-Parametric DEA Approach, Journal of Transnational Management, 17:2, 155-166, DOI: 10.1080/15475778.2012.676939 To link to this article: http://dx.doi.org/10.1080/15475778.2012.676939 PLEASE SCROLL DOWN FOR ARTICLE Taylor & Francis makes every effort to ensure the accuracy of all the information (the “Content”) contained in the publications on our platform. However, Taylor & Francis, our agents, and our licensors make no representations or warranties whatsoever as to the accuracy, completeness, or suitability for any purpose of the Content. Any opinions and views expressed in this publication are the opinions and views of the authors, and are not the views of or endorsed...
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...Is the reliance on the financial sector an inherent weakness of the UK’s liberal market economy? The United Kingdom’s City is an internationally recognised financial centre. Given the predominance of the City, the UK’s economy finds itself accommodating to this active and volatile industry. Before discussing whether or not this reliance on the financial sector is an inherent weakness of the UK’s liberal market economy, two questions need to be explored: firstly, how liberal is the UK’s liberal market and; secondly, how reliant is it on its financial sector? This will be the focus of the first part of this essay and it concludes that with increasingly liberal policies becoming conventional wisdom in British politics, the continuing expansion of the financial sector is inevitable. The second part will analyse the consequences of the Financial Crisis and how the UK’s dependence on the financial sector is, within this context, a momentous drawback. However, the third part of this essay will explore the idea that although better regulation and governance is necessary, the UK should maintain its dominance in the financial sector as it has become inherent to British economic culture and offers comparative advantage over other economies. ________________ Political ideology and resulting policies are very influential in promoting or reducing the magnitude of certain economic sectors such as manufacturing, agriculture, mining or financial industries. The remarkable expansion of...
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...Comparative Performance Study of Conventional and Islamic Banking in Bangladesh Course Title: THEORY AND PRACTICES OF BANKING IN BANGLADESH Course Code: FBK 312 Submitted To: Md. Nur Nabi Assistant Professor Department of Finance and Banking Faculty of Business Administration and Management Patuakhali Science and Technology University Dumki, Patuakhali- 8602 Submitted by: Group: C (Level: 3, Semester: I) Session: 2012-2013 Faculty of Business Administration and Management Patuakhali Science and Technology University Dumki, Patuakhali- 8602 Date of Submission: 09th May 2015 ------------------------------------------------- Roll No | Registration No | Name of the Students | Signature | 1203051 | 03596 | Nusrat Jahan Rupa | | 1203053 | 03598 | Nusrat Yesmin | | 1203054 | 03599 | Nisath Salsabil Urmi | | 1203056 | 03601 | Mehedi Hasan | | 1203057 | 03602 | Hasan Shahria Nayeem | | 1203060 | 03605 | Khondokar Tanveer Ahsan | | 1203061 | 03606 | Sume Akter | | 1203062 | 03607 | Rased Amer Sohag | | 1203065 | 03610 | Nusrat Jahan Pinki | | 1203067 | 03612 | Rasel Miah | | ------------------------------------------------- Group Member Details ------------------------------------------------- ------------------------------------------------- ATTENDANCE REPORT 1) Level : 3 2) Semester : I 3) Course Code : FBK-312 4) Course Title : THEORY AND PRACTICES OF BANKING IN BANGLADESH 5) Date Of Presentation : 9th May, 2015...
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...www.ccsenet.org/ijbm International Journal of Business and Management Vol. 6, No. 7; July 2011 Financial Reform, Ownership and Performance in Banking Industry: The Case of Bangladesh S. M. Sohrab Uddin PhD Student, Graduate School of Asia Pacific Studies Ritsumeikan Asia Pacific University, Japan & Assistant Professor, Department of Finance and Banking, University of Chittagong, Bangladesh E-mail: smsohrabcu@yahoo.com Yasushi Suzuki Professor, Graduate School of Management Ritsumeikan Asia Pacific University, Japan E-mail: szkya@apu.ac.jp Received: December 17, 2010 Accepted: January 20, 2011 doi:10.5539/ijbm.v6n7p28 Abstract Bangladesh entered into the era of financial reform during the early 1980s. Most of the reforms initiated by the government have concentrated predominantly on the banking sector. Consequently, many changes relating to ownership, market concentration, regulatory measures and policies have taken place primarily to enhancing bank performance. In this regard, this study is undertaken to investigate the performance of commercial banks after the implementation of significant financial reform. Data Envelopment Analysis based frontier measures income and cost efficiency and traditional non-frontier measures non-performing loans and return on assets have been used for assessing bank performance. The findings indicate that income and cost efficiency of sample banks have increased by 37.84 percent and 15.28 percent respectively in 2008 compared to 2001...
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...of its kind in Southeast Asia, was the true reflection of this inner urge of its people. It was both a hope and a challenge to the Islam loving people of the country in general and the pioneers of the Islamic banking movement to make it a success. In the beginning there was some doubt in the minds of many people about the viability as well as the sustainability of the Islamic banking system. But the history of two decades of Islamic banking operation in Bangladesh not only removed this doubt from the minds of the people but also showed how a new banking concept based on Islamic values could so rapidly establish itself as the most modern, dynamic, and popular bank of the country. Within this short span of time the workforce of Islamic banks in Bangladesh in general and Islami Bank Bangladesh Limited, in particular, by their strong commitment and tireless effort have been able to prove the superiority of Islamic banking over conventional banking in every department of banking operations and services. The success of Islamic banks not only gave them enough floors in the field of banking but also encouraged at least one conventional bank to convert fully all its operations on Islamic principles. (Hassan, M. K. 1999) The hope and aspiration of the people to run banking system on the basis of Islamic principle came into reality after the OIC recommendation at its...
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...International ISSN: 2278-6236 Journal of Advanced Research in Management and Social Sciences Impact Factor: 4.400 MERGERS A N D ACQUISITIONS IN THE INDIAN BANKING SECTOR: A STUDY OF SELECTED BANKS Komal Gupta* Abstract: In the present era of global economy, Mergers most widely used business strategy restructuring greater market economies share, long term of corporate profitability, entering of scale etc. The present paper evaluates on the financial is conducted performance and Acquisitions have become the and strengthening new markets, capitalising the effects of merger and acquisitions to analyse the effectiveness on the banks. Two cases of merger and acquisitions of mergers and acquisitions have been taken randomly the study, first the merger of ICICI bank and The Bank of Rajasthan, Bank of Punjab. The results of the study indicate positive and acquisitions on the financial as sample for and second the merger of HDFC bank and Centurion of mergers on of the selected banks in India. Pre and post merger comparison on selected variables impact to achieve performance that there is a of the selected banks. Key Words: Mergers and acquisition, Banking, Financial Performance, Financial Ratios, Synergy. *Assistant Professor, Maharaja Agrasen College, Delhi University Vol. 4 | No. 3 | March 2015 www.garph.co...
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...Satisfaction on SME-Banking of SIBL Chapter 1 INTRODUCTION MD. AL AMIN | ID:091662 1 Analysis of Customer Satisfaction on SME-Banking of SIBL 1.1 Introduction Today, the world is becoming closer and closer. Now world is called the global village. By taking the advancement of technology people are updating themselves day to day. Now people would like to use credit card to make global transaction rather than carrying cash amount. In such case bank has brought dynamic change in the present world. In Bangladesh, bank is playing a vital role to the development of economic and socio- economic condition. Along with our government is paying more concentration on the development Small and Medium Enterprise (SME). And today SME is contributing to the development of our economy through taking loan facility of the bank. Today is the era of competition in any business especially in the banking sectors in Bangladesh. Banks are competing each other through best quality service. And some newly issued banks are coming to enhance this competition. To measure the performance of bank, it is mandatory to measure the satisfaction level of customers. Because today market is customer oriented. Some Policymaker thinks that Customer satisfaction is an important indicator of national economic health. Finally it can be said that the bank should pay more concentration on SME banking as well as customer satisfaction toward the banking activities especially on SME banking. 1.2 Background...
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...Enticed by the reform of Indian banking sector in the early 1990s and further slowdown in the economy as a result of global financial crisis in late 2000s, the current study analyzes the performance of Indian banks using data envelopment analysis. The performance is measured in terms of technical efficiency, returns-to-scale, and Malmquist productivity index for a sample of 33 banks, consisting of 19 public sector and 14 private sector banks during the period spanning 1995-96 to 2009-10. The jackknifing analysis, followed by the dummy variable regression model is used to identify the outlier and its possible impact on overall efficiency trends. Findings reveal that efficiency scores are robust in the sense that the inclusion of outlier does not affect the overall efficiency trends. The public sector bank is faintly doing better than the private sector banks in terms of (i) technical efficiency since 2003-04 and (ii) scale efficiency from 2000-01 onwards. There is growing tendency of public banks operating under increasing returns to scale, implying that substantial gains could be obtained from altering scale via either internal growth or consolidation in the sector. The difference in the Total Factor Productivity (TFP) change between these two types of banks is found to be statistically significant in favour of public sector banks. The technological change has been the dominating source of productivity growth, whereas, the contribution of pure efficiency change and scale change...
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...banks that belongs to two different sectors: a) Islamic Banks (IBs) and b) Traditional Banks (TBs). The study concentrates on the pre and post 2008 financial crisis with an aim to test if there are any significant differences in performance between the two sectors. The study applies the MANOVA techniques to analyze the financial secondary data for only publicly traded banks in the same region. The findings of the study show that there is a significant difference between the two sectors in 2007 and 2009 and there are no significant differences in 2008, which indicates the effect of the crisis on both sectors. IBs outperform TBs in 2007 and TBs outperform IBs in 2009. This result indicates the spread of the crisis to the real economy where IBs usually operate. INTRODUCTION Forty years ago Islamic Finance was virtually an unknown system; interestingly it has expanded to become a distinctive and fast growing segment of the International Financials markets. With a growth rate that ranges from 15% to 20% (EL- Qoroshy 2005). Islamic Finance in general and Islamic banking in specific become main players in the financial world. According to the IMF survey (2010) the total capital managed under Islamic Finance systems was estimated to be $820 billion at the end of 2008. More than 200 Islamic Banks operate in over than 70 countries concentrated in the MENA region and many western countries (Hassan & lewis, 2007). Obviously, the Islamic Banking sector attracts more attention during the financial...
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...Will Reforms Enable Outreach? M-CRIL Review of Rural Banking in India: Working Paper 1 Micro-Credit Ratings International Limited 602 Pacific Square, 32nd Milestone NH8, Gurgaon 122 001 INDIA Telephone: +91 124 230 9497, 230 9707, 405 0739, 426 8707; Fax: +91 124 230 9520 e-mail: contact@m-cril.com ; website: www.m-cril.com Study Sponsored by Swiss Agency for Development and Cooperation Micro-Credit Ratings International Limited Table of Contents Section Background Executive Summary 1 2 3 4 Introduction The Importance of Rural Banks Recent Performance of the Rural Banking System Reforms and the Rural Banks 4.1 A huge effort to reform the cooperative system 4.2 Sensible proposals for reorienting the Regional Rural Banks but… 5 Will Reforms Enable Inclusion? 5.1 Cooperative reform – is it good money after bad? 5.2 RRB reform – has the inclusion objective been sidelined? 6 Conclusion Page v vii 1 3 7 8 8 12 15 15 17 18 M-CRIL Review of Rural Banking in India Background This study follows from the discussion of issues in the performance of Regional Rural Banks (RRBs) written by Sanjay Sinha, Managing Director, M-CRIL and published in The Economic Times (newspaper) on 17 March 2007. In relation to financial inclusion, many of the issues raised there affect the performance of cooperative banks as well as the RRBs. These issues include • The effect of government ownership of RRBs on their ability to operate efficiently and effectively to fulfil the financial inclusion...
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