Perception of Financial Executives Regarding Merger of Indian Banks: A Critical Statistical Exploration

Abstract

The article tries to identify factors affecting merger and acquisition decision in Indian banking sector as well as to find out the motives for mergers Indian banks based on executives’ survey and their perception regarding merger of Indian banks. This empirical research based on executives’ survey finds that new geographical .area, cost advantage,  size advantage, customer base ,inorganic growth, (HR) integration, shareholders’ value, brand quality, financial inclusion, technological advantage, compliance with more regulations, corporate governance, risk perception, CSR, NPA are treated as  the important strategic motives behind  merger of Indian banks   while considering those factors in order of magnitude of computed mean as our empirical result confirms  having surveyed  executives under our study. The ordinal logit model initiates one to infer that most of the respondents consider that corporate governance, in particular, has an important and significant impact on the merging decision of Indian banks. Other notable factors like inorganic growth(IG), Shareholders value(SV), Non- performing assets(NPA), size advantage(SA) and financial inclusion(FI) are not so important factors in deciding merger decision of Indian banks as our ordinal regression results suggest.

Keywords: Perception analysis, merger, banks, executives.

DOI: 10.7176/RJFA/10-1-08