New Delhi: The government is considering to exempt the amalgamation and merger of financial institutions such as banks, insurance companies or pension funds ordered by the regulators in public interest, out of the purview of Competition Commission.
Under the amended Competition Act, 2007, firms having a joint threshold limit of Rs1,000 crore assets or Rs3,000 crore turnover, have to mandatorily get permission from the Competition Commission for merger.
The Commission could take up to 210 days to decide the fate of such mergers.
Sources said many bankers have pointed out that in certain cases, decision about merger may have to be taken at “a breakneck speed in public interest”.
“Any uncertainty about the fate of merger, acquisition for up to seven months could have a serious and destabilising impact on the businesses of the parties involved as well as interests of public,” they said.
The sources said a high-level meeting is expected to be held in the Finance Ministry next week to sort out the matter, which may decide whether government could exempt the financial institutions from reporting their mergers to the Competition Commission.
“However, final decision may be taken in this regard by Finance Minister P Chidambaram,” sources said.
Later, if the government agrees, an enabling provision may be introduced in the Act or it may be amended suitably.