According to Mr. Salman Khurshid, Corporate Affairs Minister, the government will take on board the concerns of the Reserve Bank before giving powers to competition watchdog Competition Commission of India for vetting mergers of banks.
The minister’s comments come in the backdrop of detail in the notification of certain provisions of the Competition Act in wake of opposition from the finance ministry and the RBI on certain issues.
The RBI has called for keeping bank mergers out of the jurisdiction of the competition authority, a suggestion that also has the support of the finance ministry.
The banking regulator has argued that any other regulators will not appreciate the complexities in banks’ mergers. However, voices within the Commission have expressed concern that exempting one sector would lead to similar demand from other sectors.
Although the CCI became fully functional in May 2009, provisions relating to clearance of mergers are yet to be notified.
Currently, the regulator only has powers to check abuse of dominant position and anti-competitive agreements between companies. The ministry of corporate affairs has, in the new draft sent to
The minister had said earlier that amended Competition Act 2002 including the new provisions , would be placed before the Parliament in the monsoon session, a timeline which could not be met.
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