Growth of Banking Sector: A study of various Mergers and Acquisitions in India

The banking system is considered as the backbone of any economy as it has a direct bearing on financial and economic development. The aim of the research paper is to study the growth and evolution of the banking system in India and to evaluate the benefits of mergers and acquisitions in the Indian banking sector. The secondary data for the study has been acquired from sources such as Reports and Publications of RBI, the Indian Banking Association and various websites. The banking sector in India has evolved through three chronological phases. The first phase marked the establishment and nationalization of Central Bank and Commercial Banks as well as the enactment of laws to regulate. The second phase was characterized by significant expansion in the banking sector and establishments of RRBs, NABARD, EXIM BANK, and NHB. The third phase featured liberalization, globalization and technological advancement that led to increased number of private banks in India. Payment banks and small finance banks were accorded authorization by the RBI to promote financial inclusion. In 2019, merger of public sector banks was announced resulting in 12 public sector banks in current time period. Mergers & acquisitions bring about significant financial benefits to the banking sector. It helps the bank to significantly improve its profitability, accessibility and efficiency. M&A bolsters the financial performance of the Banks by improving EPS and business per employee.