Merger of Banks: A Critical Evaluation

Abstract

Merger in banking sector has both the managerial and financial aspects. The mergers and acquisitions can also enhance the credit capacity of the banks. In order to sustain in the globalized economy, the mergers and acquisitions can be helpful to the banks. In order to create the next generation banks, the mergers and acquisitions are very helpful. But the mergers and acquisitions are not a free lunch. There are certain hurdles also. There are challenges to manage the cultural differences and staff unrest arising out of the mergers and acquisitions. The customers may also create panic at the time of mergers and acquisitions of the banks. After the merger takes place, the issues related to ownership and control needs to be solved effectively. If these issues are solved positively, the merger would result into the benefits to the banks as well as to the customers of the merging banks. If otherwise, the merger would result into the problems to all the stake holders.