Regional Rural Banks Receive Exemptions on Mergers from CCI
As per a senior official, the government has decided to exempt mergers of regional rural banks (RRBs) stated by it from the requirement of Competition Commission of India (CCI) clearance, indicating that the next phase of consolidation of such financiers may be in the works. The exemption, designed to expedite such mergers, will be available for five years, according to the statement. During this time, relevant sections of the Competition Act would not apply to these transactions, he added.
A similar five-year relief was granted by the corporate affairs ministry in 2017. The latest move comes at a time when the government is focusing more on modernising RRBs in order to spur credit growth in remote areas and boost economic growth.
It had earlier favored the amalgamation of RRBs to enable them to minimize their expenses, shore up the capital base, optimize the use of technology and raise their exposure. From 196 in FY05, RRBs came down to 43 as of FY22, thanks to a series of amalgamations.