There are many problems to adjust top leadership in institutions and the unions. Merger will affect regional flavour and end regional focus. Its repercussions will be felt everywhere.
There is still the need for banks to penetrate deeper into the informal sector of the Nigerian economy with its large untapped resources. Bankss are in a better place to widen medium and long term loans into the existent estate sector to finance lodging development which has proven to be a really profitable venture as demand soon far outstrips supply.
Most importantly, a merger will bring the best and the worst of both banks together, which means weaknesses of the banks will also initially get adopted into the system before they can be weeded out.
The ability of the industry players to embrace recapitalisation and the success of quite a number of banks in meeting the deadline stipulated by the regulatory authorities has indeed strengthened the faith of Nigerians in the financial system With banks now embracing consolidation as a means of recapitalisation as well as the successes that have been recorded in this direction within the past 15 months, there are positive indicators that the previously shallow Nigerian financial system is on the verge of radical deepening.
The quest to create an Indian bank that will be in the league of global giants is an old one. Besides, the different workplace cultures coming into contact is bound to cause some clashes in the beginning before they begin to adapt and cohabit.
Thus this paper will be looking at returns that can be achieved through strategies that encourage the practice of core banking functions as well in relation to human capital and overall national economic development.
Also, India right now needs more banking competition rather than more banking consolidation. Returns were predominantly in the form of interest on treasury bills in the money market, percentages on foreign exchange transactions and even in some cases, profits from direct importation of goods by banks under the names of fictitious companies.
Besides, with staff from all participating banks coming under the same banner, there will be surplus staff at many branches, which will lead to transfers in previously understaffed branches, usually in remote locations.
These banks declared outstanding profits at the end of their financial years to the admiration of shareholders and the detriment of the Nigerian economy.
In doing this, it will highlight the various challenges being faced by banks in the consolidation process and list out tested options to ensure that Nigerian banks achieve greater returns in real terms while improving on service delivery and repositioning for greater efficiency.
These are outlined below 5. With an estimated housing deficit of over 8 million, banks have the opportunity to create a conducive avenue for Nigerians to secure mortgage loans to finance home ownership. The developments in the sector in the past months have opened channels for new chances for the industry and placed it in premier place to be the impulsive force for the enlargement of the Nigerian economic system.
Periodic staff and branch appraisal must be enforced in order to restructure or close down non performing branches and develop a goal oriented and profit driven branch network.
It is now evident that the demand for recapitalisation and consolidation was justified and the directive was good informed. Banks must be more innovative and balance this with world class standards in operations at all levels.
Quasi-equity funding could be invested in healthy The banking consolidation directive essay Bankss with steadfast regulative steps put in topographic point in order to guarantee they maintain afloat and remain profitable over clip. With the trade unions of both banks coming into equal play with a merger, such domination is most likely to vanish, and the interests of the general public and all employees of the bank will be taken into account in its demands.
The weak capital base of Bankss has made the supply of long term finance for capital intensive undertakings in the existent sector hard. It will further take to a reversal of thinned out experient industry work force.
What should be ensured by the government. Mergers help many PSBs, which are geographically concentrated, to expand their coverage beyond their outreach. With an estimated housing deficit of over 8 million, banks have the opportunity to create a conducive avenue for Nigerians to secure mortgage loans to finance home ownership.
Why merger is good. Mergers help small banks to gear up to international standards with innovative products and services with the accepted level of efficiency. Bank consolidation has successful taken place in America, with over mergers, in the United Kingdom and even more recently in developing economies such as Malaysia.
The investing in the Federal Mortgage Bank bonds floated in the capital market by some commercial Bankss through their subordinates is so a measure in the right way. With the debut of new capital.
To evaluate the effects of merger and acquisition on employment generation in bank. Cost control must stay a critical constituent in strategic planning but must be complemented with operations betterment and efficient service bringing.
Banks must therefore embrace rural oriented banking and aim little clip rescuers while at the same clip following cost effectual steps in this chase. Mergers will result in immediate job losses on account of large number of people taking VRS on one side and slow down or stoppage of further recruitment on the other.
However, this should be carried out with right banks for the right reasons. This may lead to further consolidation in the Indian banking sector. Merger and Consolidation of Cooperatives, RRBs and UCBs Small banks present in India apart from other banks are co-operative banks, Regional Rural Banks (RRBs) and Urban Co-operative Banks (UCBs).
For instance, the Third Directive describes a "financial institution" (which is focus to the Third Directive) as any responsibility that executes one or additional of the actions listed in Annex I to the EU Banking Consolidation Directive.
Free words essay on BANK MERGERS: ADVANTAGES AND DISADVANTAGES for school and college students. Bank mergers are big affairs, with deals clocking in at a few billion rupees. All banks, big and small, aim to acquire or be acquired by other banks, and these often happen at quite an accelerated rate.
This directive led to an unprecedented number of merger and acquisition otherwise called consolidation among Nigerian banks. According to Umoh () merger and acquisition are expected to address the problem of distress among insolvent banks without an initial resort to liquidation. “banking consolidation directive”; (e) in paragraph 20(3), for “a banking co-ordination directive” there is substituted “the banking consolidation directive”; and (f) in paragraph 24(1)(b), for “Article of the second banking co-ordination directive” there is substituted “Article.
When a big bank books huge loss or crumbles, there will be a big jolt in the entire banking industry. Its repercussions will be felt everywhere. Also, India right now needs more banking competition rather than more banking consolidation.The banking consolidation directive essay