Title: Mergers in banking industry: some emerging issues

Authors: Sudarshan Maity; Tarak Nath Sahu

Addresses: The Institute of Cost Accountants of India, 12, Sudder Street, Kolkata-700016, West Bengal, India ' Department of Commerce and Business Administration, Vidyasagar University, Midnapore-721 102, West Bengal, India

Abstract: In recent times, banks in India are indeed facing various challenges from downtrend of deposits growth, lower growth of credit disbursement, target to fulfil the financial inclusion and mounting of non-performing assets, rising of operational cost, the requirement of capital infusion by the government, reconstruction and many more. This study aims to illuminate the key issues surrounding the recent mergers in the Indian banking sector. Further, it measures the technical efficiency of Indian public sector banks by using data envelopment analysis to investigate the pre-merger efficiency of the ten merger banks as well as other banks in the group. The application of the Welch's t-test shows the non-existence of a significant difference in the efficiency scores among the two groups. This study further enumerates the challenges they can face from the different angles of operational, synchronise of products, integrating technology, etc.

Keywords: merger; public sector banks; PSBs; data envelopment analysis; DEA; Welch's t-test.

DOI: 10.1504/IJSOM.2023.131285

International Journal of Services and Operations Management, 2023 Vol.45 No.1, pp.130 - 150

Received: 28 Sep 2020
Accepted: 28 Feb 2021
Published online: 06 Jun 2023 *

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