New Delhi: Amid RBI demand that bank mergers be kept out of competition watchdog CCI’s purview, Centre on Tuesday said it would take the view into consideration before notifying the key provisions that would give the commission powers to vet mergers and acquisitions (M&As).
The Reserve Bank of India (RBI) has sought that the banking sector be exempted from the proposed sections of the Competition Act, which would require all big M&As to seek Competition Commission of India (CCI) nod, saying that no other regulator would understand the complexities of bank mergers better than the central bank.
“It is in the process, there is no intention to delay but these are government procedures that have to be followed. Finance ministry and the RBI have to be taken on board, as they have some issues which will be considered,” corporate affairs minister Salman Khurshid told PTI on the sidelines of ‘Competition Law Conference 2010’ in New Delhi .
Khurshid’s comments comes amid talks that notification of sections 5 and 6 of the Competition Act may take a while, as it is facing opposition from the finance ministry and the RBI on certain issues. The two sectors empower the CCI to look into big, market-impacting M&As.
However, voices within the Commission have expressed concern that exempting one sector would lead to similar demand from other sectors.
The provisions, Khurshid said, are being looked into by the Committee of Secretaries.
“Its gone to the Committee of Secretaries. Once they give it, their comments and recommendations, we will take it up with the Cabinet,” he said.
Although the Competition Commission of India became fully functional in May 2009, certain sections of the Act still stand to be notified.
The Commission, at present, holds the power to check abuse of dominant position and anti-competitive agreements between companies.
The minister had said earlier that amended Competition Act 2002, along with the provisions, would be placed before the Parliament in the monsoon session, which did not materialize leading to reports that an ordinance could be brought in.
“Let’s first see what the issues are. Ordinance becomes necessary when there is an urgency, so we can look at it. We can look at every aspect. But there is no reluctance in the matter of time its only procedural delay,” Khurshid said.
In the amended draft, sources said, the ministry has reduced the time for vetting M&A proposals to just 180 days from the 210 days specified earlier.
Also, companies with a turnover of Rs750 crore and above and assets worth more than Rs250 crore would need to come before the CCI.