mergemania 2

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MERGER MANIA II

By

S.SRINIVASAN

PRESIDENT

NATIONAL UNION OF BANK EMPLOYEES

HOLDING COMPANIES

CURTAIN RAISER TO CONSOLIDATION

PSU BANKSS IDENTITY MOST PRECIOUS ASSET PRESERVE IT


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Cabinet to Consider Holding Company for PSU Banks:

Capital infusion with foreign funds planned:

On January 16, 2013 PTI reported that the finance ministry is contemplating a

holding company structure forpublic sector banks. This will help the banks raise

capital and government can hold on to a majority stake. The holding company is

likely to be a statutory entity, to be set up under the Parliament's new Act, and may

come up by the end of the current financial year 2012-13, the official told the

newspaper.

The holding company may also be allowed to hold government shares in other

financial companies, the official said, adding that this way the firm would have

another stream of income as dividend.

Also, the government is contemplating letting banks hold shares in one another via

the holding company, which may be permitted to be listed on the stock exchanges,

he said.

Under the process of creating the holding company, the government will transfer

its shares in all state-run banks to the company, which will raise capital from

domestic and overseas markets, and infuse funds into the public sector banks

(PSBs).

The government will transfer its shares to the holding company in a cashless

transaction. The company would hold shares in all PSBs (public sector banks),

raise debt from the market and infuse it into its subsidiaries.

Moreover, being a holding company, the fiscal burden on the government due to

recapitalization of banks will also reduce.

The government, in the Union Budget 2012-13, proposed to provide Rs. 145.88

billion for recapitalization of public sector banks in the current fiscal, excluding Rs13 billion for recapitalization of regional rural banks.

Once the holding company is set-up, such kind of provisioning may not be needed

in the Budget and the company will be similar to other public sector units, the

official said.
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The holding company will be permitted to tap funds at interest rates higher than the

London Interbank offered rate (LIBOR) -- the average interest rate charged by

London's leading lenders when lending to other banks.

The official, however, said, The capacity of the holding company cannot be

infinite. The company's equity would increase when it infuses capital into banks.

The company will enable the government to retain its majority stake in the state-

run banks, despite the strain on budgetary resources being curtailed.

If banks go to the market to raise funds through the equity mode, our

(government) equity would come down, the official said.

The Indian government is waiting for the report of the committee, headed by State

Bank of India Chairman Pratip Chaudhuri, on PSU banks' capital requirement

under the proposed Basel III norms, following which the government is likely to

present a proposal to the Cabinet for setting up the holding company.

Capital infusion has become imperative for public sector banks to meet the capital

requirements under the Reserve Bank of India's strict Basel III norms.

Earlier this month, the RBI said that Indian banks must maintain tier I capital at a

minimum 7% of risk-weighted assets when the new Basel III norms on capital

regulation of banks are fully implemented by March 31, 2018, higher than the 6%

suggested as per the global norms.

The guidelines are pursuant to the recent global financial crisis, which has

underlined the importance of sound liquidity risk management framework to the

functioning of financial institutions and markets.

The move comes after public sector banks submitted their capital requirement

plans for the next eight-10 years, after taking into account the capital requirement

under the new Basel-III framework. The government, which is keen on holding aminimum stake of 58 per cent in public sector banks, may find it difficult to infuse

large sums of money, as this would affect the country's fiscal position. Banking

industry officials say by forming a holding company, it would be possible to raise

funds from the market, and the government holding can be maintained at above 58

per cent. According to the proposal, government share in the banks would be

transferred to the holding company, which would hold 100 per cent stake in the
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bank. Since the funds would be raised by the holding company, which is an

investor in the bank, the government would continue to hold on to its control of the

bank's management, while inducting external capital into the holding companies.

The bank would pay dividend to the holding company, and this would be used for

servicing the debt for the funds raised.

Holding firm - Reserve Bankof India

MoF moots bank holding cos to help raise funds

An FHC is an entity engaged in a broad range of banking-related activities,

including insurance underwriting, securities dealing and underwriting, financial

and investment advisory services, merchant banking, issuing or selling securitised

interests in bank-eligible assets, and generally engaging in any non-banking

activity authorised by the regulators. Any non-bank commercial company that is

predominantly engaged in financial activities, earning 85% or more of its gross

revenues from financial services, may choose to become a financial holding

company, according to the US law. These companies are required to sell any non-

financial (commercial) businesses within 10 years.

The Reserve Bank of India (RBI) placed on its website discussion paper on holding

companies in banking groups for comments from the public on 27 Aug2007 See

http://rbidocs.rbi.org.in/rdocs/content/PDFs/79486.pdf). All considered, while the

intermediate holding company structure should be supported with legal structure

etc, for the present, there has to be a roadmap for moving to the BHC/FHCstructure by private and public sector banks before the banking sector is opened up

in April 2009. The latter is an international commitment. Necessary consultations

among the various stakeholders must commence as early as possible," says a note

circulated by the capital markets division of the finance ministry.

RBI suggests two options for Govt holding in public sector banks

The Reserve Bank Of India (RBI) on put out a report on its web site on 23-5-2011(see http://www.rbi.org.in/scripts/PublicationReportDetails.aspx?

UrlPage=&ID=632) Report of The Working Group on Introduction of Financial

Holding Company Structure In India dated May 4, 2011 recommending a financial

holding company model for the financial sector, which it says will protect banks

from being destabilised by the activities of other firms controlled by the same

promoter.
http://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0CDkQFjAB&url=http%3A%2F%2Frbidocs.rbi.org.in%2Frdocs%2Fcontent%2FPDFs%2F79486.pdf&ei=KJcKUfquJYaSrgfJxoD4BQ&usg=AFQjCNH-AHzRdV3GvpAoIOL6dcCX2q8okw&sig2=7NxElSucCXaTggMlsbn-qw&cad=rjahttp://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0CDkQFjAB&url=http%3A%2F%2Frbidocs.rbi.org.in%2Frdocs%2Fcontent%2FPDFs%2F79486.pdf&ei=KJcKUfquJYaSrgfJxoD4BQ&usg=AFQjCNH-AHzRdV3GvpAoIOL6dcCX2q8okw&sig2=7NxElSucCXaTggMlsbn-qw&cad=rjahttp://rbidocs.rbi.org.in/rdocs/content/PDFs/79486.pdfhttp://rbidocs.rbi.org.in/rdocs/content/PDFs/79486.pdfhttp://rbidocs.rbi.org.in/rdocs/content/PDFs/79486.pdfhttp://www.rbi.org.in/scripts/PublicationReportDetails.aspx?UrlPage=&ID=632http://www.rbi.org.in/scripts/PublicationReportDetails.aspx?UrlPage=&ID=632http://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0CDkQFjAB&url=http%3A%2F%2Frbidocs.rbi.org.in%2Frdocs%2Fcontent%2FPDFs%2F79486.pdf&ei=KJcKUfquJYaSrgfJxoD4BQ&usg=AFQjCNH-AHzRdV3GvpAoIOL6dcCX2q8okw&sig2=7NxElSucCXaTggMlsbn-qw&cad=rjahttp://rbidocs.rbi.org.in/rdocs/content/PDFs/79486.pdfhttp://rbidocs.rbi.org.in/rdocs/content/PDFs/79486.pdfhttp://rbidocs.rbi.org.in/rdocs/content/PDFs/79486.pdfhttp://www.rbi.org.in/scripts/PublicationReportDetails.aspx?UrlPage=&ID=632http://www.rbi.org.in/scripts/PublicationReportDetails.aspx?UrlPage=&ID=632


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RBI has recommended two options to warehouse the government's holding in

public sector banks. This is in view of the constraint of minimum government

shareholding of 51 per cent in these banks.

First option

Under the first option, the government holding in public sector banks (PSBs) gets

transferred to a holding company, which also holds shares in demerged bank

subsidiaries.

Because of the need for the Government to hold minimum 51 per cent in a PSB,

the first option will require the financial holding company (FHC) to be listed while

the banking subsidiary can remain unlisted, the report states.

Further, according to the report, the Government would have to continue to support

capital requirements of the bank as well as non-bank subsidiaries.

Second option

Under the second option, the Government continues to hold directly in the bank

while shareholding of all private shareholders gets transferred to a holding

company. The holding company will also hold shares in the demerged bank

subsidiaries.

Going by the second option, the Government would be required to support only thecapital requirements of the bank. The Government could also encash the value of

indirect shareholding in bank subsidiaries.

Post FHC, the Government, under the second option, could continue to hold, in

addition to 51 per cent in the bank, shares in various subsidiaries directly

equivalent to its existing indirect shareholding. Since there is no requirement of

minimum holding in these entities there will not be any need for the Government

to provide capital.

The holding company would, as per the second option, effectively, not be aholding company in the sense that it would not be holding controlling stake in the

bank. The shareholder dynamics in such cases needs to be examined since

there will be two large shareholders the holding company and the

Government.


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The RBI report says the structure may create challenges in governance. the

RBI report states. Under the second option, although the public sector character

of PSBs would not get compromised and existing government powers can continue

to be exercised, the challenge would be governance of the bank with two blocks of

directors who could have differing interests.

The government is likely to consider within a few weeks a proposal for setting up a

holding company for public sector banks to enable them to raise capital from the

market instead of seeking funds from the exchequer.

IBAs response:

Indian Banks Association (IBA), the umbrella organization of banks in India, has

drafted a response to the Reserve Bank of Indias discussion paper on banksforming holding companies to own their insurance and asset management business.

Although there were some differences among member banks as reported in new

papers on Sep 14 2007( see Economic Times ) ,who felt that the central bank is

policing and others who felt that the central bank must continue a strict vigil

on banks, the members arrived at a decision to support the creation of an

intermediate holding company.

In a document posted on its website on Sep 145 2007(see

www.iba.org.in/Discussion.doc ) ,addressing the concerns of the central bank onthe difficulty in regulating the multi-layered structure of the holding companies,

the IBA suggested, it would be worthwhile for RBI to facilitate growth of home-

grown financial conglomerates through intermediate holding company structure, as

an interim solution, pending the end-state of FHC or BHC model in the system. the

intermediate holding company may be regulated as any other non-banking finance

company

Centre mulls holding company for PSU banks

Once again on November2011 the central government mulled the idea of settingup holding company. We are moving to Cabinet for setting up a holding company

for the public sector banks, said an official source in the media. It will take 2-3

weeks. There will be one holding company for all public sector banks, sources

said. They said the Law Ministrys opinion has been sought for making legislative

changes as various acts will have to be synchronized and amendments will be

required in the Banking Companies (Acquisition and Transfer of Undertakings)
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Act, 1970 and 1980.

As per the structure proposed, 99 % of government holding in the bank will be

shifted to the Holding Company and the government will retain 1 % with itself so

that it remains a state-owned bank, sources said.

The Budget 2012-13 had proposed the setting up of a financial holding company

that the finance ministry has sought the opinion of the law ministry on a proposal

to set up a holding company for all 24 public sector banks. Such a move will need

amendments to a number of existing acts, including the bank nationalization acts of

1969 and 1980 and the State Bank of India Act 1955. Following the law ministrys

opinion, the proposal will be forwarded to the cabinet.

The setting up of a holding company, with an aim to recapitalise public sector

banks, was announced in last years budget by then finance minister Pranab

Mukherjee. The aim was to devise a mechanism to handle the growing capital

requirements of public sector banks without straining the finances of thegovernment. But it took some time for the model to be finalised as questions were

raised about its financial viability as well as the possibility of increased risk since

public sector banks account for nearly 75% of the market.

The government is likely to consider within a few weeks a proposal for setting

up a holding company for public sector banks to enable them to raise capital

from the market instead of seeking funds from the exchequer.

If the cabinet approves, the holding company could be operational from June and

manage the capital requirements of banks from the next fiscal, the official said.The holding company has the approval of Reserve Bank of India.

The finance ministry has estimated the state-owned banks capital requirement for

the next fiscal at Rs20,000 crore. But the final amount decided will be dependent

on Planning Commission approval. Of this, around Rs5,000 crore could be

allocated to the holding company.

The government has infused more than Rs12,000 crore into state-owned banks this

fiscal. According to an estimate by consulting firm KPMG, Indian banking sector

requires Rs1.1 trillion to comply with Basel-III norms.

The government said it will provide Rs15,888 crore to banks in fiscal 2012-13.

This, compared with the overall need, is just a drop in the ocean
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Capital infusion with foreign funds planned

To make the model viable, the holding company may borrow from overseas

markets at comparatively cheaper rates so that repayment problems do not

arise. The revenue model for the company would involve dividends paid by

banks. HC would help raise resources to meet capital needs of state-owned banks.

Bank recapitalisation will no longer be budget business. The company would only

raise money for capital infusion and apportion it to various public sector banks as

per their requirements, so that the exchequer would no longer have to bother about

making provisions in the budget, in managing which the government has been

walking the tight rope in view of the difficult fiscal situation.

Should the proposal go through, the government will transfer most of its

equity in public sector banks to the holding company, which will, in turn,

leverage its huge capital base to borrow overseas to meet the capital infusionrequirement of public sector banks. As result of this move the PSU banks may

be delisted from stock exchanges. The holding company will also receive

dividends, adding it will tap both debt and equity markets to raise capital. The

resources will be primarily raised through foreign borrowings, which would then

be infused as equity in various state-owned banks.

RBI pushes for consolidation...

On Dec 27, 2011 Times of India, reported asunder:

RBI has said that consolidation in the banking sector would pave the way forstronger financial institutions with the capacity to meet corporate and infrastructure

funding needs, and to rescue distressed lenders. However, it has prescribed a `non-

operative bank holding company' structure to avoid

creation of complex institutions.

"Voluntary mergers and transfers help consolidation in the financial sector and

pave the way for stronger financial institutions to rescue the weaker ones. Such

voluntary measures, while saving the constituents of weaker institutions, provide

business opportunity to the stronger ones to spread their presence in different

geographies," said Anand Sinha, deputy governor, RBI. Sinha was speaking at the

Financial Planning Congress 2011, organised by the Financial Planning Standards

Board of India here last week. He added that India needs bigger banks to meet its

infrastructure needs and to finance Large industrial projects.

However, the Competition Act, 2002 (as amended by the Competition

(Amendment) Act, 2007) could come in the way of consolidation. One of its
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provisions requires an enterprise proposing to enter into a combination via a

merger or an amalgamation to notify the Competition Commission. The

commission has been allowed up to 210 days to decide on it before the default

clause kicks in.

RBI's comments come at a time when many in the Indian industry feel that Indian

banking has not kept pace with India Inc's funding requirements. In the two years

preceding the outbreak of the 2008 global financial crisis, most business houses

acquired multinationals through leveraged finance, with the support of

international borrowers. "Given the crisis in the West, it would be difficult for

Indian corporates to acquire international assets as none of the large lenders are in

a position to extend funds for acquisition," said the head of a large consultancy

firm. At the same time Indian banks do not have the balance sheet size to fund

large corporates.

The RBI group recommended a separate regulatory framework for FHCs and a

new law for regulating FHCs. While the RBI should be designated as the regulator

for FHCs, a separate unit within the apex bank should undertake the regulatory

function with staff drawn both in-house and from other regulators. The group also

recommended a consolidated supervision mechanism through memorandum of

understanding between regulators.

On listing the holding company, the working group has recommended that

requisite space needs to be provided to the holding company to raise capital for its

subsidiaries.

The financial services sector in India has been witnessing growth in the

emergence of financial conglomerates, the RBI has stated, adding, With the

enlargement in the scope of the financial activities driven by the need for

diversification of business lines to control the enterprise-wide risk, some of the

players are also experimenting with structures hitherto unfamiliar in India.

Obviously, the central bank was referring to the state-owned premier bank of the

country, the State Bank of India (SBI) and the largest private bank of the country,

ICICI Bank, which had recently taken steps to set up intermediate holdingcompanies for their non-banking operations such as insurance and asset

management. In a discussion paper on the subject in August 2007, the RBI has

preferred a financial holding company model over an intermediate holding

company model, as the latter is seen as less transparent and difficult to

regulate. The central bank had then struck down proposals from SBI and

ICICI Bank to set up intermediate holding companies.


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broking, not to mention the different FDI thresholds for different sectors. The

option to list individual entities has its own operational challenges.

An RBI official said listing the holding company of a bank would set the stage

for consolidation of accounts in systemically important financial institutions.

But the differences between the government and the central bank may further delay

the guidelines for new bank licences, Unless there is clarity on the rules for

existing banks, the RBI cannot issue guidelines for new licences, as it will create

two sets of rules - one for existing banks and another for new ones.

The RBI's draft guidelines on new banking licences also said that the NOHC

would need to reduce its shareholding in the bank to 15% within 10 years and

retain at that level. The RBI has suggested that the holding company of the

bank gets listed while the bank itself remains unlisted

The fallout for new licensees is considered to be less than that for the existing

banking and financial groups. It does, however, raise the existential question of

how these developments are likely to affect the timeline.

The question which remain unanswered is Achieving a simple one step

holding structure and bringing all existing businesses under it may be easier

said than done given that most promoter groups hold their interest through

holding companies. Also, if banking groups are to remain predominantly

banks, what happens to the existing businesses of these groups?Do they get

regulatory indulgence or is it goodbye to banking dreams?

The group, headed by deputy governor of RBI Shyamala Gopinath has suggested

that the FHC structure should be made mandatory for new entrants to the banking

space. An FHC will typically have a bank, an insurance company, an asset

management company and others of the sort operating under it. The Gopinath

group has also recommended a fully-capitalised model for the holding company

instead of an intermediate holding structure as that would make the relations

between the operating companies and the holding company, complex.

Recently, the government of India directed Life Insurance Corp. of India Ltd, or

LIC, to pick up preferential stakes in public sector banks over and above the cap of

a single-investor limit of 10%. This has lead analysts to believe that government

will likely let cash-rich semi-government companies to do the bank capitalisation

job.


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A holding company can directly go to institutions like LIC, offer ownership of

itself and ask for money, freeing up the government from any criticism for taking

direct help of others to mend its house in order, say analysts.

A holding company that decides on capital allocation will likely have discretionary

power to capitalise certain large banks at the cost of the smaller ones. This will

allow the government to actively push top five-six banks to build scale. The

finance ministry is considering using the Specified Undertaking of UTI, or SUUTI,

as a holding company for all the state-run banks in a bid to fast track its budget

proposal to house all government holding in state-run companies under one

structure to help raise capital easily.

The union cabinet has already approved a proposal to wind up SUUTI and shift its

assets to a new asset management company.

The big five banks, other than State Bank of India, hold about 25% of the market

share. Combined with the business of State Bank of India and its associates, these

banks will control 50% of the market share with 30% shared by other public sector

banks and 20% by private and foreign banks.

The need for large global Indian banks is being felt by various stakeholders as

India grows rapidly. If India grows by at least 6-7% per year, the economy will be

the fourth largest economy in the world, behind US, China and just behind Japan

by the of the decade. This would require global banks with good financial power

rather than a fragmented banking system to support the growing needs of Indian

firms.

A credit growth of 20% would require banks to grow their business by 25% every

year, according to bankers and this would mean increasing capital needs.

The government may subsequently pare its stake on smaller banks to below 51%

and retain control on only such handful large banks.

There is no need for the government to hold more than 51% in all public sector

banks, said a banking analyst .

The shareholding in other banks can be allowed to fall to 26-30%, enough for

effective control, while the money raised can be used to recapitalise bigger banks,

the analyst said.

The small number of banks that control half of the market share will allow

the government to push through any kind of market reforms, say analysts,
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and this will also allow far greater access in raising fund through the market

than what can be achieved through merger of banks.

A holding company, when listed, allows tapping the capital market in two

ways -- the bank that needs money directly can approach the market as well

as the money raised through the holding company.

Also, if the government ever wants to create large banks to be in the top-50 of

the financial world, it can pool capital from smaller banks and allocate them

to the ones that need money to become big.

A holding company, owned by investors, also enables the government to

implement a consistent policy across banks and thus also allow better

compensation for bank chiefs as well as make the banks more profitable and

competitive.

The holding company may also take shape of an investment arm of the

government of India, in line of sovereign funds in other Asian countries.

Out of the 24 banks that government owns, in 10 banks it has a stake of less than

60%. The government stake in Bank of Baroda is 57.03%, the lowest that it holds

in any bank. Its stake in State Bank of India, the largest lender, is 59.4%, while that

in Punjab National Bank is 58%, leading less maneuverability for the

government to dilute its stake in some of the banks to recapitalize them.

Earlier at the economic editors conference the finance minister had spoken of

passing supplementary grants, if required. He had set up the committee on capital

requirements with the finance secretary in the chair. It is required to come up with

recommendations by November 15, 2013. The total with capital requirements of

all the banks are estimated to be Rs 3,50,000 crore. Last year the government

provided capital support of Rs 20,157 crore to a host of banks owned by it. Other

options include issue of preferential allotment of warrants, preferential shares etc.

Once Parliament approves the supplementary grants, the government will decide

how much money the holding company needs to raise abroad, according to anofficial privy to the decision.

Now once again RBI wants bank consolidation

The Business Standard on Thursday, Jan 31, 2013 reported


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On April 24, 2008 in a major push towards consolidation in the banking space,

the Reserve Bank of India has presented a paper to the government highlighting a

proposal for merger of banks. A proposal discussed by the RBI brass with key

finance ministry functionaries in Delhi second week of April 2008week, has

favoured merger of large public sector banks with small state-run entities and

private players, sources close to the development told Business Standard. It has

also identified the potential partners for a merger based on the RBI's inspection

report for the last two-three years, they added.

The idea is to first seek consolidation on a voluntary basis as has been the stated

stance of the government and the RBI. While the government has been pushing for

board-driven consolidation, almost no proposal discussed so far has materialised

due to opposition from unions and political pressure. The sources said enabling

legislation for forced merger of the banks has been provided under section 45

of the Banking Regulation Act. Using this provision, the RBI, undergovernment advice, can push the merger of two banks The RBI said If such

mergers do not fructify, the regulator has suggested that the government

could step in to push consolidation. Sources pointed out that even in the case of

merger of a small private bank with a larger player in the private sector, it takes a

long time for the proposal to be approved by courts and get shareholder nod. On

the other hand, the clock is ticking for the RBI and the government to open the

doors to foreign banks. According to the central bank's roadmap, foreign banks are

slated to get a more liberal access from 2009.

Large lenders asked to handhold small banks

The Business line published the following article on On December 17, 2012

As competition intensifies, size would matter for PSBs.

Public sector bank (PSB) consolidation was a hot topic in 2008-09. Mooted by the

then Finance Minister P Chidambaram, the issue did not get the required thrust

after he left the Ministry. With him back in the saddle again, there is a growing

expectation that the issue will come up on the governments drawing board.

At the recent Bancon meeting, while addressing bankers, the Finance Ministeragain raised the issue of PSB consolidation. The emerging scenario is also turning

favourable to the process of consolidation. Mounting pressures to issue new bank

licences, which will induce enhanced competition from foreign banks getting full

bank licences, and entry of a new set of private sector banks, will also precipitate

the PSB consolidation. The Reserve Bank (RBI) has already set the process of

new licences in motion by approving the Dutch banking major Rabo Banks


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application for a full banking licence. Goldman Sachs was also given a licence to

undertake primary dealership business in debt a few months back.

Big Fish

The biggest whale in the Indian banking waters, State Bank of India, is consideredto be small fry in the global banking ocean. Despite cornering about 25 per cent

of the banking business in the country, SBI is ranked 60th in the list of Top 1000

Banks in the world by The Bankerin July 2012. Ideally, India should have 4 or 5

global-scale banks. Recently, the government is said to have asked SBI to do a

detailed cost-benefit analysis of its merger with its five associate banks. The bank

not facing any tangible problem in merging two of its subsidiaries earlier might

have worked as a trigger.

Once all its subsidiaries are merged with it, it would be among the top 10 banks in

the world in terms of various parameters. Grapevine has it that recently theMinistry of Finance called the chairmen of SBI and BoI on the issue of merger

and if this were to happen, SBI will become the fifth or sixth largest bank in

the world. (Why not SBI and PNB? Emphasis ours)? With the advent of new

century, Indian corporates are spreading their tentacles by acquiring companies

abroad. For funding cross-country acquisitions Indian banks should acquire size

and sophistication. Thus, there is no substitute for consolidation in PSU banks.

Pros and Cons

Despite the fears raked up by the happenings to large banks in the US and Europe,that proved the hypothesis that big banks cannot fail wrong, there are some clear

advantages that large banks enjoy. Bigger banks would be in a position to take

advantage of efficiencies of scale, scarce talent could be utilised more fruitfully

than in a smaller bank, better exploitation of brand equity and capital utilisation.

By experience, one can say that the larger the balance sheet you working on, more

is the ability to weather economic ups and downs.

Most of the other ticklish issues coming in the way of mergers can be sorted

out very easily today than four years back. The big issue in bankconsolidation then was the interface for various information technology (IT)

platforms used by different banks. Now, that is a non-issue. Most of the

banks have integrated operations with Core Banking Solutions (CBS) in place,

and most of these platforms are capable of talking to each other. The same is

the case with ATMs.


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The Department of Financial Services has worked to make PSBs become clones in

terms of technology, standardisation of manpower recruitment, accounting

practices, and most chairmen of PSBs are working in tandem with the advice of the

Banking Division on these issues. And therefore, it would be easy for

consolidation.

Human resources issues have also been smoothened with the same salary and perks

structure adopted across PSBs. PSBs, having added 1.8 lakh personnel to their

ranks over the previous year, are in a position to accommodate the surplus staff in

the wake of mergers rather fruitfully in different roles.

Some of the overlapping branches can be converted into offices for specialised

services. Even cultural issues arepass, with many employees prepared to work in

areas far away from their native place.

Hierarchy issues at the top management can be handled by following the pattern

adopted by State Bank of India. The high level personnel could be accommodated

at the senior levels of the merged entity by splitting the positions of the chairman

and managing directors, the executive directors of merging banks could be

appointed as deputy managing directors. However, the process may call for making

some amendments to the Banking Companies (Acquisition and Transfer of

Undertaking) Bill.

Permutations, combinations

The first question that arises after initiating the process of consolidation is who

would be the predator and who would be the prey. It should be based on a clear

criterion. In the process of preparing PSBs for Basel-III guidelines, which seeks to

raise the tier-I capital to 9 per cent from 8 per cent now, the government is

expected to recapitalise banks to the tune of Rs 15,000 crore.

If the mergers can address this issue and give some relief to the government, it

would be an added advantage, besides ensuring other synergies in scale of

business, even geographical spread (branch concentration) and lower NPAs of the

merged entity.

In the process, some weaker banks must be able to find some strong banks in

alliance, besides it should improve the return on investment (RoI).

The following are some combination* for undertaking consolidation of PSBs, in

the light of these parameters:


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SBI, BOI and BOB To be among the largest banks in the world

Canara Bank, Indian Bank, BoM, IOB and United Bank of India To be the

second largest bank

PNB, Vijaya Bank, Andhra Bank and IDBI To be the third largest

Allahabad Bank, Central Bank, Corporation Bank and P&S Bank To be the

fourth largest

OBC, Syndicate Bank, UCO Bank and Dena Bank To be the fifth largest

(The author is Chief Advisor, Banking Law, PDS & Associates, and former

CMD of Corporation Bank)

These combinations have been formed keeping the CBS (core bankingsolution) platform in view, officials said.

Inference:

From the chronological sequence of events mentioned above it is pellucid that

the setting up holding company and consolidations of PSU banks are equally

likely events ( not mutual excusive ) of the same side of the coins orchestrated

and endorsed by RBI, Government and IBA.

NUBE HOLDING FIRM OPINION THAT HOLDING COMPANY FOR

PSU BANKS IS NOT BEING A GOOD IDEA AFTER ALL

The NATION UNION OF BANK EMPLOYESS the 4 th largest union in the

comity of union aprioi holds firm stand that The finance ministrys proposal to

transfer all government holdings in public sector banks to a single financial

holding company (FHC) needs careful consideration before it heads for cabinet

consideration shortly.

The ostensible reason behind such a proposal is to use the combined equity

strength to get a higher leverage in overseas borrowings for scaling up

capitalisation of public sector banks in line with the stringent Basel III

norms on capital adequacy that are set to kick in phases from 2014, going

up to 2019.


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Under the FHC model, the identity of the promoter of PSU banks will

change from the President of India to the proposed FHC. Notwithstanding

the fact that FHCs promoter shareholder will still be the President of

India, and therefore, the FHC will be a government-owned companyresponsible to the government and taxpayers, it may well be possible to

divert public attention from huge amounts of capital infusion into PSU

banks under the new dispensation.

This, especially when not all state-owned banks are known to pursue

prudential norms, and require regular bailouts from the exchequer.

A significantly high amount of capital infusion amounting to Rs 1.4 lakh

crore is required for the Basel III compliance over the next few years.

Under the proposed corporate structure, PSU banks will becomesubsidiaries of the FHC, which will, in turn, manage their aggregate capital

requirements.

A quick analysis by Financial Chronicle Research Bureau of 24 listed

PSU banks revealed a collective market capitalisation of about Rs 4,00,000

crore, with 62 per cent of this, amounting to Rs 2,50,000 crore, being the

value of government holdings. A little over 40 per cent of the

governments holdings are accounted for by just one bank, State Bank of

India.

In the country, the holding company format has so far been used by India

Inc. Recently a Reserve Bank of India committee has also suggested

making the FHC framework mandatory for all new banks and insurance

companies, as well as for existing banks, where the promoter is in non-

banking businesses. Now, with the government also itching to use this

concept for managing public finances, policy makers may be entering the

grey zone.

While some other countries too use the holding company format to

selectively manage taxpayer money, its potential for misuse has been

debated upon. Loss of transparent accounting and indulgence in financial

chicanery are some of the severe allegations against its use by

governments. Private companies, particularly the listed ones, have to not


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only disclose their standalone financials to shareholders, but also

consolidated numbers.

While it is true that an FHC for PSU banks will be able to better access

foreign loans, servicing those loans and re-paying them will still be the

governments responsibility. Taxpayers have a right to be informed about

the effect of foreign borrowings on the exchequer, but an FHC would only

keep such liabilities hidden from the budget documents. The taxpayer

deserves a better deal than that.

One of the lessons of the financial crisis was the downside of having 'too

big to fail' entities.

The sub-prime crisis of 2007, the consequences of which are still being feltby the world economy, highlighted glaring deficiencies in the regulation of

banks and in the financial sector in general. A number of measures have

been taken both at the international level (under the auspices of the Bank

for International Settlements (BIS)) and by national regulators by way of

tightening bank regulation. Perhaps the most comprehensive is the Dodd-

Frank Act (2010) passed in the United States (US). A fundamental problem

that remains unresolved is what is called the too-big-to-fail problem or the

problem posed by Systemically Important Financial Institutions (SIFIs).

Banks that are very big (in relation to the size of their economies) cannot

be allowed to fail because the failure of these would cause significantdisruption in the economy. Knowing this, managers at these banks can take

enormous risks. If these work out, they will collect big rewards; if they do

not, the government will rescue them

Under Basel 3, some disincentives for bigness have been created. A higher

than normal requirement of capital is stipulated for SIFIs. This, however, is

far from adequate to prevent failure and the problems associated with

failure remain. Two major proposals are on the table for dealing with

SIFIs. One is the recommendations of the Independent Commission onBanking (2011) in the United Kingdom (UK) (also known as the Vickers

Commission, after its chairman, John Vickers). Another is the Volcker

Rule which has been built into the Dodd-Frank Act in the US.

Volcker said the problems surrounding banks that are too systemically

significant to be allowed to fail have not yet been convincingly settled,


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despite being the heart of the reform question (Huffington Post, 20

September 2011).

It is more plausible that the problem of SIFIs is posed, not by scope, but by

bigness. Beyond a certain size, banks become difficult to manage; theyalso pose systemic risks because of the difficulty in resolving them when

they fail. There may be greater merit, therefore, in addressing size and

concentration in banking than scope. The size of a banks assets in relation

to GDP and the share of the top five or six banks in total banking assets

may be more appropriate parameters to monitor. Large banks may need to

be broken up, not by limiting the scope, but by selling off assets across the

entire spectrum. Given the sizes of some of the large banks and the state of

financial markets, whether this is feasible at all in todays context is a

different matter.

We also need to address ownership structure in banking, an idea that is

almost totally missing in the present debate. The scandals that have made

headlines in recent months the rigging of Libor, money-laundering, non-

compliance with sanctions, etc have prompted calls for a sweeping

change in culture at banks.

There is more than an element of delusion to these calls. No major cultural

change is possible under the incentives that go with private ownership.

What we need in banking is an alternative model in the form of publicownership. It is necessary to have at least a few large banks under public

ownership. Then, shareholders, customers and employees, all have a

choice. They can go with the go-getting culture of private banks or the

risk-averse culture of government-owned banks. The culture in the system

as a whole changes, with conservatism in the public sector offsetting a

greater appetite for risk in the private sector.

Can government-owned banks perform in the face of competition from

private banks? We have tentative answers from the Indian experience. Size

confers an advantage as does access to government business, managerialcosts are lower, there is greater depositor confidence, and listing on stock

exchanges makes for better focus on commercial performance. A track

record of stability in earnings in itself can help improve market ratings.


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Government ownership must be supported by more intrusive regulation

and supervision than has happened in the recent past in the west. This must

include norms for the composition of boards, approval of independent

directors, and approval of top management at banks. Norms for risk

management must go well beyond those prescribed by the BIS riskmanagement cannot be left entirely to banks or to market discipline.

Everybody understands that the problem of SIFIs cannot be tackled by

increasing capital requirements alone. Perhaps, the time has come to

recognise that limiting the scope of banks is not the answer either. We need

a multi-pronged approach that addresses size and concentration, the

ownership structure and entails far more intrusive regulation than we have

seen in the recent past.

A serious issue that needs informed public debate. Recently, govt. madeseven groupings where smaller banks were assigned to bigger 7 banks. It

looked like an arranged courtship. These days we are hearing from the

west a new phenomenon called too big to fail What will the impact of

such a concern if we also just for aping the west to consolidate our banks

to make them bigger with all the NPAs. The rationale for such mergers

needs to be known. Also, see the stagnation of the merger of just two

airlines. Will the Dept. of Financial Services play an active role or merely

be a fifth wheel ordering about the banks. Also will the political leaders

use their position and talk to labour leaders and ensure their active andensure their active suggestion and participation

As one from another branch of financial services, let us dust out from the

archives how the Congress ministers in the fifties successfully merged the

243 private insurance companies varying in every aspect into a single

LIC in just about four years. That continues to be a classic case of

excellent coordination between the political leaders-civil servants,

regulators, industry officials and above all the employees and their unions.

The report on currency and finance for 2006-08, released on Sep 05 2008,said the introduction of Basel II norms could prompt small banks to merge

with bigger players to maintain capital adequacy. But, consolidation

among large banks, in particular, would raise competition and moral

hazard concerns, that is, too big to fail. A new report from a research

division of the Reserve Bank of India, or RBI, has raised concerns about

consolidation in the banking industry and warned that creating mega


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banks could lead to increased operational risks, contagion risks and

systemic risks. This alone is enough to justify stand of NUBE against

holding companies.

The RBI has advocated FHC/BHC structure in as much as the banks wouldbe much better protected from the possible adverse effects from the activities of

their non-banking financial subsidiaries. Infact, it may also be possible to consider

allowing non banking subsidiaries under the FHC/BHC structure to undertake

riskier activities hitherto not allowed to bank subsidiaries such as commodity

broking. It has therefore contended that it will be useful to explore the possibility

of adopting a BHC/FHC Model. However, a proper legal framework needs to be

created before such structures are floated and it is ensured that no unregulated

entities are present within the structure. It ahs further stated that , it will be useful

to contain the complexity in the BHC/FHC Model as also in the Bank Subsidiary

Model of conglomeration to the bare minimum. Towards this end, it will bedesirable to avoid intermediate holding company structures.

The major motivation for FHC/BHSC MODEL as outline by RBI is given

below

In terms of existing instructions, a banks aggregate investment in the

financial services companies including subsidiaries is limited to 20% of the paid up

capital and reserves of the bank. In a BHC/FHC structure, this restriction will not

apply as the investment in subsidiaries and associates will be made directly by theBHC/FHC. Once the subsidiaries are separated from the banks, their growth of the

subsidiaries/associates would not be constrained on account of capital.

In the context of public sector banks, the Government holding through a

BHC/FHC will not be possible in the existing statutes. However, if statutes are

amended to count for effective holding then, the most important advantage in

shifting to BHC/FHC model would be that the capital requirements of banks'

subsidiaries would be de-linked from the banks capital. Since the non-banking

entities within the banking group would be directly owned by the BHC, the

contagion and reputation risk on account of affiliates for the bank is perceived to beless severe as compared with at present.

BHC/FHC structure as recommended by RBI is diagrammatically given below in

fig 3.Figure-1: A typical bank-centric organization structure - Bank Subsidiary


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Model

Bank

Insurance SecuritiesAsset

Management Others


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Figure 2: A Financial Conglomerate with holding company at the top

BHC / FHC

3. A Financial conglomerate with holding company at the top as

well as an intermediate holding company

Let us look into Recommendation 15, 16 of the working group

of RBI

Recommendation 15:

If the holding company is to function as an anchor for capital

support for all its subsidiaries, requisite space needs to be provided to the

holding company for capital raising for its subsidiaries. In this context it is

possible to envisage to have ether a listed holding company with all itssubsidiaries unlisted or both the holding company with all or some of

the subsidiaries being listed depending on the objectives and strategy of the

financial group and the prevailing laws and regulations on investment

limits .Given the circumstances prevailing in India listing can be

allowed at the FHC level as well as the subsidiary level subject suitable

safeguards and governance /ownership norms prescribed by regulators from

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Main Banking

subsidiary

InsuranceSecurities

Asset

ManagementOthers

Other bankingsubsidiaries

BHC / FHC

Main Banking

subsidiaryIntermediate

holding company

Housing

Finance Othe

Other banking

subsidiaries General

Insurance Life InsuranceAsset

Management


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time to time

Recommendation 16 for Public Sector Banks

There is a constraint of minimum government shareholding of

51% in public sector banks.

Option I: Government holding in PSBs gets transferred to aholding company which also holds shares in demerged bank

subsidiaries. Because of the need for government to hold

minimum 51% in the bank, this option will require the FHC to

be listed while bank subsidiary can remain in unlisted.

Government would continue to support capital requirements of

the bank as ell as no banking subsidiaries

Option II: Government continues to hold directly in the bank

while shareholding of all private shareholders gets transferred to holding

company. The holding company will also hold shares in the demerged bankssubsidiaries. The government has to provide support the capital requirements

of the bank. But it states further that Although, the public sector character

of banks would not get compromised and existing government powers can

continue to be exercised, the challenge will be governance of the bank with

two blocks of directors who could have differing interests.

Hence there is every likely hood the first option will be

implemented by the government. In which case with all the

nationalized banks will become subsidiaries of the singlemonolithic, oligopolistic, financial conglomerate FHC. With

the voting rights of the shareholders of public sector amended

to 10% by the parliament recently, there is every possibility

shareholder directors& other directors of FHC will wield

considerable powers to dictate terms on the subsidiaries. This

makes the board of FHC omnipotent and that of the

subsidiaries rudderless and or of recommendatory nature of

being accountable to the apex board of FHC. In otherwords

the policies of the subsidiaries will be defacto decided by the

FHC,. as is being done by the government even now in public

sector banks despite declaring autonomy to PSBs on paper.

That nothing is decided without the approval of Government

and RBI directors despite majority directors supporting a

proposal in the board underscores this irrefutable fact that

board of PSBs is not above board with genuine powers of

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autonomy and all its policies are controlled by remote by the

government . The major fallout of this option for this

pyramid model of FHC discussed above will not only be on

the management of subsidiaries but also on their recognized

unions which will become ineffective as most of HR policies

arrived hitherto under bipartite culture with respective

managements will be dictated by board of FHC, which in the

long run make it inactive weakening its identify and pavingway for consequent deunionisation.

Another question which remains unanswered is the

constitution of board of FHC. There is every likelihood the

government will take umbrage, in as much object of the FHC

is to manage only capital requirements there is no need for

workmen/officer nominees in its board.

In tune with the policies of IMF, even in 1981, government of

India opened 3 point new chapter in Industrial relations

ordinance, notifications, and directives. Agreement,

settlements, customs, practice and culture of individual banks

were sealed in airtight containers and confined to the Department

of Achieves (for future historians to have a field day).

Negotiations, discussions not only consume time and energy, but

also require the logic and sense to meet sagacity of UNIONS. So

all independent agreements on housing loans, promotions,

transfers and other welfare schemes etc. between bank and their

unions were replaced by directives unilateral, arbitrary andoften meaningless.

The same happened to powers of workmen nominee on the Board

of Nationalised Bank, since the workmen directors had become

essential nuisance for them (Government introduced ESMA in

1981) as they had freely, frankly, fearlessly, forthrightly

participated in all the machinations of banking growth, such as

analysis and sanction healthy loan proposals, and ensuring

that a hard working sincere official, without God-Father also

comes up in the life and given his due share of promotion. In

other words, from the trade union point of view we were not

satisfied with mere participation since it would mean our agreeing

to the way bank is managed. We therefore, made it our business

to ensure that the management of the bank does not leave much to

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be desired and resolved to have a say how the bank is to be

managed through our nominee to ensure Board is above board.

It is because of such sincere participation and involvement of

workmen directors, notification emanating from the distilled

wisdom of Department of Bankers was issued replacing the

powers of board on promotions with DPC. Further frequent

interventions of workmen nominee, in sanctioning large proposalsfor industrial houses and their constant vigilance on men and

matters irked the powers that be. Therefore slowly the powers of

the employee nominees were sought to be curbed. Surreptitiously

the Management Committee System was introduced where the

CMD, ED, Govt.nominee, RBI nominee and the Chartered

Accountant Director are the permanent members and one from

the other Directors is given rotation for six months only. The

result is at the most the employee nominee could be a member of

the Management Committee only once in six months during his

tenure.

It should be noted that all vital decisions regarding sanctioning of

credit proposals, writing offs; compromise proposals, etc. are

decided by this all powerful and omniscient Management

Committee. In short the Management Committee usurped the

powers of the Directors and ultimately made the Board a real

showpiece before which matters are placed only for information

and confirmation.

It has further been seen to it that the employee nominee does not

find a place in the Audit and Inspection Committee throughout his

tenure thus preventing him from having even a cursory reading of

the RBI Inspection Report of the respective Banks which contains

the real picture of the Institution.

Despite all odds, clipping of powers from time to time the

directives of ministry, our nominees have been discharging

their functions in the best traditions. Who have ensured that the

banks shall be run not only for our common good but also for

the countrys good and for that there should be equal power to the

true representative of bank, workmen nominee.

With the powers of board getting curbed in this FHC model as

explained above, in future all the internalagreements, settlements,

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customs, practice and culture of individual banks arrived at

through bipartite culture between the union and respective banks

will sealed in airtight containers and will now be replaced by

Notifications, Order, Directives(NODs)of the FHC , the

consequeses of which will be disastrous to recognized unions

in the subsidiaries( Nationalized Banks ) under the

monolithic FHC .

Conclusion

The very objective of setting up the holding company is to raise money for

capital infusion and apportion it to various public sector banks as per their

requirements, so that the exchequer would no longer have to bother about

making provisions in the budget, in managing which the government has

been walking the tight rope in view of the difficult fiscal situation. The

holding company will raise capital to meet Capital Adequacy Ratio, as per

Basel III standards which is a measure of a banks capital, expressed as apercentage of the banks risk-weighted credit exposure, is also expected to

increase, as the RBI a credit growth increase.

It is pertinent to mention here the Countries that failed to enforce Basel

reforms.

The scorecard issued on Financial Times onOctober 18, 2011 by the Basel

Committee on Banking Supervision, which writes the rules, raises serious

questions about whether some of the worlds financial centers are

paying lip-service to global efforts to make banks safer and prevent arepeat of the financial crisis.

Six of the 27 countries that set global banking regulations still have not fully

implemented the Basel II reforms agreed in 2004, and only 11 of the 27 have

drafted rules to enact the tougherBasel III standards that are supposed to

replace them Both the US and China are among the countries that are in the

process of implementing Basel II.

The Basel II framework is widely seen as having contributed to the 2008

banking crash by allowing banks to understate risk and hold too little capitalagainst unexpected losses. However, its risk-based structure remains an

essential part of the stricter Basel III framework, which includes higher

capital requirements and the first global liquidity rules.

The scorecard is part of a larger effort to shame big countries into

implementing the commitments they have made at annual meetings of the

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G20, a group of the worlds richest economies, and to insure that financial

institutions will not avoid tougher rules by shifting to new locations.

The Basel II report card found that one member country, Argentina, had

made no effort to implement the agreement at all, and five more were still in

the process of implementation. As for Basel III, 11 countries have written

drafts, but nine of them are members of the EU, which introduced a bloc-

wide version in July. Five more countries hope to have drafts completed bythe end of the year, including the US and Switzerland. The rest, including

Russia, Japan and India, will take longer.

EU member countries have for months have been debating how to

implement the minimum bank capital standards agreed under Basel III. Their

arguments have unfolded as the EU works to complete its fourth Capital

Requirements Directive and its Capital Requirement. There are reports as of

27 May 2012 debates continued with UK, Sweden, and Spain, with the

support of the ECB ,taking Osborne View named after perhaps its most

ardent proponent, George Osborne (UK Chancellor of the Exchequer)andGermany and France, with the support of the European Commission,

opposing their views and taking Schuble View in honour of Germanys

Minister of Finance, Wolfgang Schuble. With regard to Capital

Requirements Directive and its Capital Requirements Regulations per Basel

III.

Hence what is the urgency to push for consolidations / FHC without a,

credible, transparent, accountable social dialogue in India by the

Government?

That being the case, still with the view of reducing the risk weighted credit

exposure, i.e. reduce the NPAs the UNIONS time and again had demanded

the following time and gain to strengthen PBU banks in right earnestness.

Stringent measures should be initiated to recover the increasing Bad

Loans in the Banks.

Securitisation Act was claimed to be used against the defaulting

borrowers but nothing worthwhile has been achieved by utilizing thepowers under the Act. The Act has not been enlarged to cover

attachment of personal assets of the borrowers and their kith and kin.

A large number of the defaulters who created NPAs in the first place

have got their property back at a much lower price, and will not have

to repay loans. If this becomes a part of the system, those who take

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loans from banks in future will not be serious about following norms

and regulations

A vicious circle that will eat into the vitals of the banking system will

be created. Hence the unions demands the establishment of an

independent statutory audit system in banks, along the lines of the

Comptroller and Auditor General (CAG).

Stop needless evergreening /restructuring of NPAs

Government should Publicize the list of defaulting big Borrowers

declare willful defaults as a criminal offence confiscate Properties of

individual directors in defaulting companies make defaulting

companies/Directors ineligible for further Bank Loans and other

facilities initiate strong legal reforms to expedite recovery of Bank

Loans

Needless to underscore here despite the long rope that the NPA group gets

from its bankers, it often accuses the lending institutionsin its court case

of not being as tough on other borrowers who stand on the same footing.

The big question is this: if the Group says its bankrupt, why does it fight

institutions trying to take over its assets? Obviously, the Group still has

assets worth fighting.

Had these measures been implemented the PSBs would have emerged muchstronger and there is no need to adapt westerns models which have proved

ineffective and junk in their own countries. The flip-side of banking sector

reforms has been the overemphasis on profits and virtual neglect of the

distributive role of the banks. Now, only strong and high net worth

companies within the organized sector are capable of raising funds,

declaring it NPA, get ting it restructured at a considerable lower rate of

interest, while the credit disbursal to small borrowers has sharply declined.

That is why we say that "Financial Reforms" and NPAs &Scams are

like an Object and its Shadows! About which we shall cover in e ournext series titled Merger Mania III .

Suffice to state, in this background, the current merger moves in any form,

i.e. setting up of holding companies and /or by consolidation of PSU banks

is unwarranted. Hence the Government should drop these move and focus on

efficiency Success of any economic reforms is to be judged on the

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touchstone of all positive Benefits to vast masses of our country where

mounting unemployment and price rise of essential commodities constitute

the worst curse of the nation. Any reforms of the banking system should be

built on the institutional structure that has created it rather than seek to

destroy it as is now being done. The banking industry is in need of true

reforms in pursuit of true nationalization, but the strategy for it does not

have to subvert the basic goals of development nor does it have to be forced

at a pace with adhoc, arbitrary moves of mergers, FHCs etc tinkering ofbanking regulation acts, etc without any public debate and study that will

result in liquidation of the institutional structure built up over decades of

faith.

As Indians we should take pride that Indian banks have at historically

maintained their core and overall capital well in excess of the regulatory

minimum all through its chequerd, purposeful history of social banking.

Therefore the raison detre of the adoption of the FHC model itself is

questionable.

When the financial crisis intervened, the talks of bank mergers receded

into the background in the wake of the 'too-big-to-fail' argument

advanced in favour of rescuing large imprudent banks which means it is

difficult to allow large banks go under, without such failure having far-

reaching systemic implications. But it has come up again at the annual

banking summit in Pune last week where the FM urged banks not to fear

consolidation. He is entirely right. PSBs have no need to fear

consolidation but, equally, they should not consolidate out of fear.

NUBE SHALL NOT ALLOW THIS Clearance Sale of IndianBanking Industry by the Government. We therefore have to be in

readiness to launch a CAMPAIGN and fight resolutely to frustrate the

evil and sinister designs of the Government. Let us prepare ourselves to

fight to preserve ourIDENTITY by opposing the merger move. The one

who is courageous never has a doubt of being fortunate. Even if there are

difficult situations and challenges, the faith of being fortunate never fades

away. This faith enables such a person to recognize and use the available

resources in a worthwhile way. Even during difficult situations, there is

never a need to stop as faith gives courage to move on. Let us prepare our

heart and minds for this faith and struggle.

To be continued ..

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mergemania 2

Documents

Transcript of mergemania 2