With the ministry of corporate affairs examining the possibility of keeping out the banking sector from the purview of the countrys new competition law regime, the government is now looking at international models on bank merger clearances before arriving at a decision.
The ministry, which is the administrative organ for the Competition Competition Commission of India (CCI), is looking at the issue after the Reserve Bank of India (RBI) reportedly raised objections over keeping the banking sector within the domain of the Competition Act.
The idea is to reach a decision, which is not just prudent as per the Indian economic scenario, but is also in line with the international best practices, a government official, who wished not to be named, told ET.
The CCI, which is the countrys competition regulator and is guided as per the provisions of the Competition Act, 2002, is authorised as per law to take note of large value merger proposals before allowing them a go-ahead.
The CCI is, however, yet to be given the authority to take note of merger proposals.
We are studying competition models from across the world and it will only be after weighing all options that the government will decide whether to exempt bank mergers from the CCIs purview, the official said.
Earlier this week, minister for corporate affairs Salman Khurshid had said that his ministry would examine the possibility of keeping banking sector out of the CCIs purview.