Competition watchdog CCI has welcomed parliamentary panel's recommendation to keep bank mergers outside its purview temporarily and said that it will pitch in wherever there is "an element of urgency" in decision making.
"What the Standing Committee on Finance has recommended is that they accept the proposal in the bill (The Banking Laws (Amendment) Bill 2011), to exempt bank mergers but what they have said is this should be an exception and this should not be for all time," CCI Chairman Ashok Chawla said.
"They should revisit it and see the experience what is happening and then decide after some time," Chawla told reporters on the sidelines a function organised by the Standing Conference of Public Enterprises (SCOPE).
The Committee, in its report on the Banking Laws (Amendment) Bill, 2011 tabled in the Lok Sabha earlier this week, has supported the government's proposal to keep bank mergers outside the purview of the Competition Commission of India temporarily but with certain caveats.
While it supports the government's proposal to keep bank mergers outside CCI's purview, it recommended that this exception should be considered as a special case.
It suggested the expedient measure be revisited in "due course in the light of experience gained by" regulators RBI and CCI.
"Where some weak bank or failing bank is going to be acquired by a healthy bank where there is an element of urgency, where there is some dispatch required in the decision-making, we will intervene, but not across the board in respect of all mergers," Chawla said.
Sections 5 and 6 of the Competition Act, 2002 empower CCI to approve high voltage mergers and acquisitions.
