The Centre will not permit the Competition Commission of India (CCI) to scrutinise mergers and acquisitions in the banking sector.
In a written reply in the Rajya Sabha on Tuesday, Minister of State for Finance Namo Narain Meena said the government feels “reference to CCI is not considered necessary (in case of mergers and acquisitions in the banking space)”.
“Amalgamations, reconstructions, mergers are approved in consultation with the Reserve Bank of India (RBI) and sanctioned by the central government under specific statutes of Parliament. The mergers are approved primarily in public interest or in the interest of depositors or of the banking system in India or to secure proper management of the banking company.”
“RBI is of the view that reference to CCI may cause avoidable delays in the process. As timeliness is most critical and crucial, it is felt that the process of amalgamation, mergers etc should not hamper by seeking approval from multiple authorities,” he added.
The Competition Act 2002 permits such sector-specific exemptions if it is necessary in the interest of security of the State or in public interest.
The Corporate Affairs ministry had notified the merger and acquisition provisions under the Act last week, thereby empowering CCI to take up merger, acquisition, amalgamation cases. The notification had not given any blanket exemption to any sector.
On the question of exempting the banking sector, corporate affairs ministry officials said it can be considered on a case to case basis.