Motives For Mergers And Acquisitions Of Public Sector Banks In India: An Analysis Of Employees Opinion

Abstract

Many Public Sector Banks (PSB) depend on the government’s aid to live on, adding to its burden. In 2014, the PJ Nayak Panel recommended privatizing state-run banks to lighten this burden on the government. But the idea of banking mergers in India only took off in 2018. The RBI had said that merging them would help revamp India’s banking system, creating global, robust and well-funded banking majors, if successful. In August 2019, Union Government announced a mega-merger of 10 Public Sector Undertaking (PSU) banks in India into four. The following year, FM Nirmala Sitharaman conveyed the cabinet’s approval of the same. She also said that the merger would take place after the boards of the banks met and decided how to take things further. The mergers were to take effect from 1st April 2020 (as per a press release dated 28th March 2020). So how do banking mergers in India impact you as a customer or a stakeholder in the banking system? In this regard, the present paper examines perception of employees of the banks towards mergers motive. This research is based on primary data; the data have been collected through structured questionnaire.