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| MCA studies global models to keep banking out of CCI's purview |
| Press Trust of India / New Delhi Oct 14, 2009, 14:37 IST |
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The Corporate Affairs Ministry is studying international models to examine whether mergers and acquisitions (M&As) in the banking sector could be kept out of the Competition Commission's purview.
"We are studying competition models from across the world and how bank mergers are treated in other countries and after weighing all options we will decide whether to exempt bank mergers from the CCI's purview," MCA sources told PTI.
The Competition Commission of India (CCI) is the country's anti-competitive practices watchdog.
The Reserve Bank has reportedly written to the Finance Ministry asking that mergers and acquisitions of banks be kept out of the purview of the Competition Act, 2002.
The government, however, is yet to notify Sections 5 and 6 of the CCI Act, which will empower the Commission to vet M&As that can have a bearing on competitions in a particular sector.
When notified, banks would require the CCI's approval to go ahead with mergers. The RBI, at present, is the authority that gives nod to bank amalgamations.
Earlier this week, Corporate Affairs Minister Salman Khurshid had said that the ministry would examine the possibility of keeping banking and shipping sectors out of the CCI's purview.
"There are other people, too, who... Say that there are areas where there can be exceptions for them. We receive such petitions. We will examine them, we have no problem," he said.
Sections 54 and 55 of the Act grants power to the government to exempt certain sectors or enterprises from the competition watchdog's purview.
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