An Empirical Examination of Mergers and Acquisitions as a Strategic Tool for Strengthening Urban Cooperative Banks in India

This paper is an empirical investigation of mergers and acquisitions as a strategic instrument of enhancing the urban co-operative bank in India in the backdrop of post-2015 regulatory and structural reforms. The study uses the secondary data of supervisory reports, published studies to analyse the changes in the key financial and prudential indicators occurring prior to and following merger events. The results show that consolidation has facilitated a rise in capital adequacy, moderation of non-performing assets, improved depositor confidence, and increase in profitability is slow and skewed. It is indicated that governance, regulatory controls and integration capacity of mergers after the merger are the key factors that determine the success of mergers as opposed to scale expansion. The paper places mergers and acquisitions in the context of facilitating, facilitating institutional stability and compliance, in the context of a larger reform agenda. In particular, by studying the urban co-operative banks, the study fills a gap in the literature of consolidation and provides evidence-based information to policymakers, regulators and the management of co-operative banks.