The aim of this paper analyses Bank Mergers & Consolidation and offer insight into the effect of Mergers & Consolidation on the performance of banks after the merger in terms of the banks 'financial and liquidity status. Banks merger cycle is not a new phenomenon in India. Banks in India had consolidated as early as 1920 when the Bank of Bengal, Bank of Bombay and Bank of Madras merged into Imperial Bank of India, now commonly known as the State Bank of India. Several acquisition and merger deal by banks have since taken place in India. According to a study by the Institute of Mergers, Acquisitions and Alliances (IMAA), Merger & Consolidation in the Indian Banking sector witnessed many ups and downs between 1985 and 2013, with significantly high Merger & Consolidation transactions reported during the period 1995 to 1996. Some of the major banks since 1990 have been Bank of Tamil Nadu Ltd. with Indian Overseas Bank, Bank of Punjab Ltd with IDBI Bank Ltd., State Bank of Indore with State Bank of India and many more. By using ten different financial ratios, it explores the consequences of Merger & Consolidation. The thesis hires research staff ex-post facto and spans fifteen years (2000–2015). The data is composed of individual Banks and RBI's reported annual reports. The analysis finds a non-significant negative correlation between the financial results of Merger & Restructuring and Banks. Nevertheless, the situation around post-merger liquidity has improved. However, the marginal increase in the position of liquidity does not suffice to dismiss the null hypothesis. These results show that banks 'mergers & acquisitions aren't a panacea for banking sector ills. Comparatively, forced mergers & restructuring will adversely affect prospects for banks.

Bank, merger & consolidation, financial performance, liquidity position, RBI.

https://doi.org/10.58396/gsef010203

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