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India has an extensive banking network, in both urban and rural areas. All large Indian banks are nationalized, and all Indian financial institutions are in the public sector. The Reserve Bank of India is the central banking institution. It is the sole authority for issuing bank notes and the supervisory body for banking operations in India1. It supervises and administers exchange control and banking regulations, and administers the government's monetary policy. It is also responsible for granting licenses for new bank branches. The banking system has three tiers. These are the scheduled commercial banks; the regional rural banks and the cooperative and special purpose rural banks. Commercial banks are categorized as scheduled and non-scheduled banks, but for the purpose of assessment of performance of banks, the Reserve Bank of India categories them as public sector banks,private sector banks and foreign banks.
Sometimes acquisitions are described, more bluntly, as takeovers and other times, more diplomatically, as mergers. But there is a difference between both. Merger The case when two companies (often of same size) decide to move forward as a single new company instead of operating business separately. Acquisition The case when one company takes over another and establishes itself as the new owner of the business.
The buyer company The stocks of both the companies are swallows the business of the surrendered, while new stocks are target company, which ceases issued afresh. to exist.
FINANCING M&A
Mergers are generally differentiated from acquisitions partly by the way in which they are financed and partly by the relative size of the companies. Various methods of financing an M&A deal exist: Cash Payment by cash. Such transactions are usually termed acquisitions rather than mergers because the shareholders of the target company are removed from the picture and the target comes under the (indirect) control of the bidder's shareholders. Stock
Payment in the form of the acquiring company's stock, issued to the shareholders of the acquired company at a given ratio proportional to the valuation of the latter.
Economy of scale: This refers to the fact that the combined company can often reduce its fixed costs by removing duplicate departments or operations, lowering the costs of the company .Thus increasing profit margins. Economy of scope: This refers to the efficiencies primarily associated with demand-side changes. Increased revenue or market share: This assumes that the buyer will be absorbing a major competitor and thus increase its market power (by capturing increased market share) to set prices. Synergy: For example, managerial economies such as the increased opportunity of managerial specialization. Another example are purchasing economies due to increased order size and associated bulk-buying discounts. Geographical or other diversification: This is designed to smooth the earnings results of a company, which over the long term smoothens the stock price of a company, giving conservative investors more confidence in investing in the company. However, this does not always deliver value to shareholders Resource transfer: resources are unevenly distributed across firms and the interaction of target and acquiring firm resources can create value through either overcoming information asymmetry or by combining scarce resources. Hiring: some companies use acquisitions as an alternative to the normal hiring process. This is especially common when the target is a small private company or is in the startup phase. In this case, the
acquiring company simply hires the staff of the target private company, thereby acquiring its talent.
dimensions. The Committee submitted its report on 23 April,1998 with the following suggestions: The Committee recommended for merger of large Indian banks to make them strong enough for supporting international trade. The Committee recommended the use of mergers to build the size and strength of operations for each bank. large banks should merge only with banks of equivalent size and not with weaker banks Review the RBI Act, the Banking Regulation Act, the Nationalization and the State Bank of India Act.
I C I C I Bank Ltd.
Ishares B S E Sensex Mauritius Company I C I C I Bank Ltd. I C I C I Bank Ltd. First Data Crop State Bank Of Indi & I C I C I
G T L Ltd. Bank Of Rajasthan Ltd. [merged] I C I C I Bank Ltd. Jaiprakash Power Ventures Ltd.
[merged] 12 Jul 2007 12 Dec 2006 09 Dec 2006 24 Nov 2006 11 Oct 2006 04 Sep 2006 08 Jul 2006 08 Jul 2006 23 May 2006 07 Mar 2006 I C I C I Bank Ltd. Sangli Bank Ltd. [merged] Sangli Bank Ltd. [merged] I C I C I Bank Ltd. C M C Ltd. United Western Bank Ltd. [merged] I C I C I Bank Ltd. I C I C I Bank Ltd. Andhra Cements Ltd. Mascon Global Ltd.
Bank Ltd. Dubai International Capital I C I C I Bank Ltd. I C I C I Bank Ltd. Clsa I C I C I Bank Ltd. I C I C I Bank Ltd. Bajaj Holdings & Invst. Ltd. Bajaj Holdings & Invst. Ltd. I C I C I Bank Ltd. I C I C I Bank Ltd.
RESEARCH METHODOLOGY
DEFINING THE RESEARCH PROBLEM:- The definition of the problem includes the study of MERGER AND ACQUISITION AMONG BANKS SPECIFIC REFERENCE TO ICICI AND HDFC BANK. DEVELOPING THE RESEARCH PLAN:- The development of research plan has the following steps:
DATA SOURCES The secondary data is given more emphasis. RESEARCH APPROACH:-
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