MERGERS AND ACQUISITIONS IN INDIAN PUBLIC SECTOR BANKS: A COMPARATIVE ANALYSIS OF PERFORMANCE BEFORE AND AFTER CONSOLIDATION

Abstract For Indian public sector banks, mergers and acquisitions have proven to be a crucial business strategy, especially in light of the government's efforts to fortify the banking industry in order to better address economic difficulties and provide credit. The goal of the bank consolidation movement is to build stronger, more robust banks that can compete globally. This report offers a thorough evaluation of the results of such acts by examining the performance metrics of significant public sector banks that have merged. This research looks at how mergers and acquisitions (M&A) affect the performance of public sector banks (PSBs) in India, with a particular emphasis on the time frame leading up to and following significant government-initiated consolidation efforts. Using a dataset of multiple PSBs that underwent consolidation, the study examines financial ratios and other critical performance metrics before and after the merger across a five-year period. According to preliminary research, some banks show a considerable increase in operational effectiveness and profitability following the merger, while others experience difficulties with integration, declining asset quality, and human resource management. The study also emphasises how outside variables, like shifting market dynamics and legislative requirements, can affect post-merger performance. By offering insights into the distinct dynamics of M&As within the Indian banking sector and making policy recommendations for upcoming consolidation initiatives, our work adds to the body of current knowledge. The results highlight the necessity of a customized method for assessing merger performance in the context of public sector banks, taking into account the particularities of this financial sector.