|
Lok Sabha
Reserve Bank of India has issued guidelines on merger and amalgamation between private sector banks and with Non-Banking Finance Companies (NBFCs). The guidelines emphasize that while amalgamation are normally decided on business considerations such as the need for increasing the market shares, synergies in the operations of businesses, acquisition of a business unit or segment etc. it is essential that consideration like sound rationale for the amalgamation, the systemic benefits and the advantage accruing to the residual entity are evaluated in detail.
The guidelines also provide that in case of amalgamation of NBFC with a banking company, the Board of Directors of the banking company should also examine the credit facilities availed by NBFC from banks/FIs. These guidelines, issued on May 11, 2005, are available on RBI website www.rbi.org.in/notification.
Shri Palanimanickam, Minister of State for Finance gave this information in reply to a question raised by Shri G. Karunakara Reddy.
BSC/BY/GN-271/05
|
