CCI gives nod to Kotak-ING Vysya Bank merger

The Competition Commission of India (CCI) has given its approval to proposed Rs 15,000-crore merger deal between Kotak Mahindra Bank and ING Vysya Bank.
CCI in its approval mentioned that this merger is not likely to have an appreciable adverse effect on competition in India. The CCI also has 0bserved that the ING Vysya does not have significant market share in any of the relevant markets and there is presence of large players in these markets. So it will act as a competitive constraint to the parties.
This approval is considered as important step for merging of two banks to form new entity. This merger will make Kotak Mahindra Bank fourth-largest private bank in India in terms of total business. The biggest three private banks are ICICI Bank, HDFC Bank and Axis Bank.
Background

• In November 2014, Kotak Mahindra Bank had announced that it is acquiring ING Vysya Bank in an all-stock deal.
• The management of these banks are expecting that the new merged entity will be operational by April 1, 2015.
• The acquisition will help Kotak Mahindra Bank to widen its reach in South Indian market and also help in acquiring SME customers as ING Vysya Bank was having stronghold in SME customers.
• After merger the combined banking entity will have a widespread network of 1,214 branches across pan India.

Month: Current Affairs - February, 2015