Journal Press India®

Impact of Merger on Efficiency of Commercial Banks : A Case Study

Vol 24 , Issue 2 , July - December 2023 | Pages: 51-64 | Research Paper  

https://doi.org/10.51768/dbr.v24i2.242202306


Author Details ( * ) denotes Corresponding author

1. * Rashika Jain, Assistant Professor, Department of Commerce, Vasanta College for Women, Rajghat Fort, Varanasi, Uttar Pradesh, India (rashika597@gmail.com)

Purpose: The study aims to see the impact of bank mergers on their efficiency. Design/Methodology/Approach: The present study has considered 8 bank mergers during the period 2007-2019. Using Data Envelopment Analysis, three three-year pre-merger efficiency of anchor banks has been compared with its three-year post-merger efficiency. Findings: The study has shown that there is no difference in the pre and post-merger efficiency of ICICI Bank, Indian Overseas Bank, and HDFC Bank. However, SBI and Kotak Mahindra Bank witnessed a decline in scale efficiency after a merger. Bank of Baroda also witnessed a decline in managerial and scale efficiency after a merger. Research Limitations: The study has only considered three pre-merger and post-merger years. Secondly, the study is based on secondary data. So the results are dependent upon the authenticity of the data collected. Practical Implications: The present study is a guide for policymakers and researchers in the area of bank mergers. It suggests the sincere need to revisit and review past bank mergers in the light of findings of the present study. Originality/Value: This study is original and one of its kind because none of the studies have considered bank mergers during this particular study period (2007-19).

Keywords

Data Envelopment Analysis, Efficiency, Pre-merger Period, Post-merger Period, and Commercial Banks.

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