Mergers and Acquisitions in Indian Banks: Performance Dynamics and Regulatory Perspectives

The Indian banking sector has undergone an unprecedented phase of consolidation over the last decade, driven by regulatory reforms, capital adequacy pressures, and the pursuit of scale and stability. This study examines mergers and acquisitions in Indian banks with a focus on post-merger performance dynamics and the regulatory rationale underpinning consolidation initiatives. Drawing on secondary data from public and private sector banks involved in major merger episodes, the analysis evaluates changes in profitability, asset quality, operational efficiency, and risk indicators across preand post-merger periods. The findings suggest that while mergers contribute to balance sheet expansion and improved capital buffers, short- to medium-term performance outcomes remain mixed, particularly with respect to cost efficiency and non-performing assets. Regulatory interventions by the Reserve Bank of India and the Government of India have played a decisive role in shaping merger outcomes by prioritizing systemic stability over immediate profitability gains. The study further highlights integration challenges related to legacy asset quality, organizational alignment, and technological harmonization, which moderate anticipated synergy benefits. By synthesizing financial performance evidence with regulatory perspectives, the paper contributes to the growing literature on banking sector consolidation in emerging economies. The findings offer policy-relevant insights for regulators and bank management by emphasizing the importance of sequencing reforms, strengthening governance mechanisms, and aligning merger objectives with long-term financial sustainability.