Banking Final Draft-Hemant and Adarsh

NATIONAL LAW UNIVERSITY, ORISSA

BANKING LAW

FINAL DRAFT

APPLICATION OF COMPETITION LAW IN

THE BANKING SECTOR

SUBMITTED TO:

MR. NACHIKETA MITTAL

ASST. PROFESSOR OF LAW

SUBMITTED BY:

ADARSH TRIPATHI 2009/B.A.LL.B.(HONS.)/003

HEMANT GOYAL 2009/B.A.LL.B.(HONS.)/018

Group Code- Q

DECLARATION

I hereby declare that the project work entitled “Application of Competition Law in the

Banking Sector” submitted to the National Law University Odisha, is a record of original

work done by me under the guidance of Mr. Nachiketa Mittal, Faculty Member, NLU

Odisha. The text reported in the project is the outcome of my own efforts and no part of this

project assignment has been copied in any unauthorized manner and any copied part of this

project has been incorporated with due acknowledgement.

Adarsh Tripathi Hemant Goyal

2009/B.A.LL.B.(Hons.)/003 2009/B.A.LL.B.

(Hons.)/018

TABLE OF CONTENTS

TABLE OF CASES__________________________________________________________3

TABLE OF AUTHORITIES___________________________________________________3

STATUTES AND BILLS_______________________________________________________3

RULES, REPORTS AND GUIDELINES_____________________________________________3

INTRODUCTION____________________________________________________________4

RESEARCH METHODOLOGY________________________________________________5

OBJECTIVES_______________________________________________________________5

HYPOTHESIS_______________________________________________________________5

RESEARCH QUESTIONS______________________________________________________5

COVERAGE AND SCOPE______________________________________________________5

CITATION STYLE___________________________________________________________5

CHAPTER 1- COMPETITION LAW ISSUES IN THE BANKING SECTOR____________5

MERGERS IN BANKING SECTOR________________________________________________6

HORIZONTAL AND VERTICAL ANTI-COMPETITIVE AGREEMENTS BY BANKING COMPANIES_8

ABUSE OF DOMINANT POSITION BY BANKING COMPANIES___________________________9

CHAPTER 2- BRINGING THE INDIAN BANKING SECTOR UNDER COMPETITION

ACT, 2002_________________________________________________________________10

ABSENCE OF MECHANISM FOR REGULATING COMPETITION IN THE BANKING SECTOR____10

EXTENDING THE COMPETITION ACT, 2002 TO THE BANKING SECTOR_________________12

CHAPTER 3-CHALLENGES IN APPLYING COMPETITION ACT IN THE BANKING

SECTOR__________________________________________________________________13

CONFLICT BETWEEN ROLE OF RBI AND CCI_____________________________________13

LACK OF EXPLICIT LAWS___________________________________________________13

CONTROVERSIES SURROUNDING BANKING LAWS AMENDMENT BILL, 2011____________13

CONCLUSION: A WAY AHEAD_____________________________________________14

BIBLIOGRAPHY___________________________________________________________15

1 | B A N K I N G L A W F I N A L D R A F T

ARTICLES________________________________________________________________15

BOOKS__________________________________________________________________15

ONLINE SOURCES_________________________________________________________16

MISCELLANEOUS__________________________________________________________16


TABLE OF CASES

Consumer Online Foundation v. Tata sky Ltd & Ors., Case no. 2 of 2009,

Competition Commission of India (March 2011).

Hoffmann-La Roche & Co. v. Commission [1979] ECR 461.

Northern Pacific Railway Co. et al. v. United States, 356 U.S. 1, 5-6 (1958).

United Brands Co. v. Commission [1978] ECR 207.

TABLE OF AUTHORITIES

STATUTES AND BILLS

Act against Restraints on Competition, 1998 (Germany).

Competition Act, 2002 (India).

Reserve Bank of India Act, 1934 (India).

The Banking Laws (Amendment) Bill, 2011 (India).

The Banking Regulation Act, 1949 (India).

The Companies Act, 1956 (India).

The Takeover Code, 1997 (India).

RULES, REPORTS AND GUIDELINES

Committee on Competition Law and Policy . Mergers in Financial Services.

Committee Report, Directorate For Financial, Fiscal and Enterprise Affairs (OECD),

2000.

European Commission Merger Regulations, No 139/2004 (Jan. 20, 2004).

Guidelines for Mergers/Amalgamations of Private Sector Banks, RBI/2004-05/462

Ref.DBOD.No.PSBS.BC.

Narasimham Committee. Review of the Financial System. Government, New Delhi:

Government of India, 1991.

Narasimham Committee. Review of the Financial System. Government, New Delhi:

Government of India, 1998.

OECD Secretariat. "Competition Issues and Remittances in Latin America." Fourth

Meeting of The Latin American Competition Forum. London: OECD, 2006.


INTRODUCTION

Ever since the Competition Commission of India (CCI) started taking baby steps to regulate

the jungle of competition abuses in the country, and decided some very successful cases,

many started howling for an exemption from its bite.1 The recent exemption has been sought

by the Banking Sector asking that CCI must refuse to review mergers taking place in the

Banking Sector.2 But, the problem again is that if CCI is restricted from reviewing

competition in the banking sector, then do we have some other competition regulating

mechanism for the Banking Sector.

Competition in the banking sector helps the economy significantly and, in India, we can see

its benefits after the enactment of Competition Act, 2002.3 But, looking at common offences

like cartelization, mergers, etc., it becomes clear that Banking Sector is also not sacred and

anti-competitive activities do take place in this sector.4 Furthermore, after the adoption of

Liberalization and Privatization model in 1991, more freedom has been granted to Private

Banks as well, thereby resulting in more players in the market.5 With the increase in private

banks in the market, the idea of profit making over consumer and national interest has also

drastically increased. Thus, more techniques to curb competition in the Banking Sector are

being invented and employed by these market players. Hence, a strong need exists to regulate

competition in the Banking Sector as well.

In light of this necessity to regulate competition in the Banking Sector, present research will

look at Banking Regulations Act (1949), Reserve Bank of India Act (1934), etc. to find out

the existing mechanism for regulating competition in the Banking Sector. Further, research

will move to scrutinizing Indian Banking Sector with respect to specific offences under

Competition Act, to derive the better way of maintaining competition in this Sector. Later,

this research will bring out existing problems in applying competition law in the Banking

Sector, like clash between CCI and RBI, Competition Act superseding other Banking laws,

etc. Lastly, the study will conclude by giving practical suggestions to solve this conflict,

which will help in proper growth of Banking Sector, thereby serving the national interest.

1 Mehta, Pradeep S. “Will RBI be a better judge for banking mergers?” Business Standard, 09 May 2012.2 Editorial. “End regulatory stasis: Empower or wind up the Competition Commission of India.” Business Standard, 31 March 2011.3 Panagariya, Arvind. “Competition Commission of India: A game changer.” The Economic Times, 26 January 2010.4 Proctor, Charles. The Law and Practice of International Banking. London: Oxford University Press, 2010.5 Sinha, Ashok. “Don't keep bank mergers out of CCI purview.” The Hindu, 20 December 2011.


RESEARCH METHODOLOGY

OBJECTIVES:

The project aims to study the emerging issue of application of competition law in the banking

sector in India. The research will derive, if, Competition Act, 2002 is applicable in the

banking sector and what are the problems faced in applying Competition Act, 2002 in the

Banking Sector.

HYPOTHESIS:

The researchers are working with the hypothesis that competition law is applicable in the

banking sector. Moreover, researchers also have a hypothesis that Competition Act, 2002 is

applicable to Banking Companies in India and they can be held liable under it.

RESEARCH QUESTIONS:

The broad research questions framed by the researchers are:

1. Whether Banking Companies can be made liable under the Competition Act, 2002?

2. Is there any role played by RBI in regulating competition related issues in the banking

sector?

3. What are the problems faced in applying Competition Act, 2002 in the Banking

Sector and possible solutions to these problems?

COVERAGE AND SCOPE:

The project is mainly restricted to the study of Indian laws and cases. Moreover, the time

phase covered is only after 2002 i.e. after the enactment of Competition Act, 2002. Lastly, the

project will restrict only to the study of application of competition law in banking sector and

allied fields like corporate laws regulations, SEBI guidelines, etc. are not covered within the

ambit of this project.

CITATION STYLE:

The researchers will follow Chicago Manual of Style, 15th ed., 2003 uniformly throughout the

project.

CHAPTER 1- COMPETITION LAW ISSUES IN THE BANKING SECTOR

The competition law mainly describes two types of agreements that are horizontal and

vertical type of agreements with different tests for both of them.6 Also there are few other

6 Mehta, Pradeep S. "Competition Law Regime in India: Evolution, Experience and Challenges." Concurrences (Cuts International), 2006: 150-156.


practices done by dominant enterprises, which are generally regarded abuse of dominant

position.7 Lastly, the most serious violations of competition law are illegal mergers and

cartels, which are regarded as per se violations that do not entail any subsequent

justifications.8

MERGERS IN BANKING SECTOR

Merger is amalgamation of two or more business enterprises for better and efficient

functioning.9 Governments may object mergers because it may be contrary to the industrial or

foreign policy, or a transaction which could lead to production of illegal quality or quantity of

a particular product. Market players might object to a merger transaction, at it could lead to

monopoly or could create barriers to entry and similar anti-competitive practices.10 At this

level role of competition law becomes pertinent, because it seeks to control mergers that may

hinder competition in the market.

The reason why antitrust authorities are better placed for antitrust enforcement in banking is

that in assessing the likely effect of a bank merger on competition the analysis is not different

from any other one, they should consider whether the merger could create or facilitate the

exercise of market power, where market power is defined as the ability of firms to increase

price or reduce quality from pre-merger levels.11 A merger could have anticompetitive effects

by making it profitable for a leading Banking company to exercise market power unilaterally,

or by increasing the likelihood that other banking companies in a market could successfully

maintain a collusive outcome.12

Where banks hold considerable equity positions in non-financial companies, some bank

mergers can lead to a post-merger bank having considerable influence over competing

7 Dugar, S M. Guide to Competition Law. Nagpur: Lexis Nexis, 2010.

8 Kumar, Abir Roy & Jayant. Competition Law in India. Kolkata: Eastern Law House, 2008.

9 European Competition Commission. EU Competition Law: Rules Applicable to Merger Control. Brussels: Eurpean Union, 2010.

10 Motwani, Tejas K. "Analysis of Merger Control Under Indian Comopetition Law." CCI Internship Report, 2011.

11 OECD Secretariat. "Competition Issues and Remittances in Latin America." Fourth Meeting of The Latin American Competition Forum. London: OECD, 2006.

12 Kanoria, Madhav V. "Application of Competition Law in the Banking Sector: A Global Perspective." CCI Internship Report, 2010.


enterprises. The most radical form of this problem arises when a bank merger directly implies

a merger among non-financial companies.13

Due to all these possible anti-competitive effects, the control of bank mergers has

strengthened substantially in the last two decades. Whereas only a few countries had bank

competition control in place in 1987, many countries have institutionalized this control by

2004. In contrast to most other sectors, the control in banking was introduced in an already

existing regulatory framework, and was often designed to conform to it.14

Table taken form empirical research conducted by Center for Financial Studies (Frankfurt) available at http://www.cepr.org/meets/wkcn/6/6638/papers/ongena.pdf.

13 Committee on Competition Law and Policy . Mergers in Financial Services. Committee Report, Directorate For Financial, Fiscal and Enterprise Affairs (OECD), 2000.

14 Ongena, Elena Carletti & Steven. The Economic Impact of Financial Laws: The Case of Bank Merger Control. PhD Thesis, Frankfurt: Center for Financial Studies, 2005.


Above data depicts the kind of affirmative steps are taken by various nations to counter anti-

competitive mergers. The control is taking place by strengthening the existing competition

law framework to tackle frequent incidents of anti-competitive bank mergers. For an instance,

the President of the Bank of Italy in 2005 blocked the acquisition of Banca Antonveneta (BA)

and Banca Nazionale de Lavoro (BNL) by the Dutch ABN Amro and the Spanish Banco

Bilbao Vizcaya Argentaria (BBVA) for ‘prudential reasons and formal errors’. This is

possible because in the EU the control of bank M&A is subject to both competition and

prudential control.15 This brought the debate that Banking Sector is also subject to

Competition Law requirements and competition law violations do take place in Banking

Sector as well.

Initially Section 37(3) of the German Act Against Restraints of Competition16 and Article

3(5)(a) of the EC Merger Regulation17 contain the so-called “Banking Clause” that exempted

certain concentrations from the mandatory competition regulations. However, at a later stage

it has been clarified by the authorities that it was never the purpose of Banking Clause to

facilitate the rescue or restructuring of credit institutions, but rather to exempt such

transactions from the merger control regime that due to their temporary character and their

connection with the banks other activities are generally not expected to affect the market

structure.18 Hence, it is clear that the view is changing around the globe and now even

Banking Sector is made subject competition law requirements.

HORIZONTAL AND VERTICAL ANTI-COMPETITIVE AGREEMENTS BY BANKING

COMPANIES

In Banking Sector both vertical and horizontal agreements are common practice and several

of such agreements restrict competition in the market, thereby attracting competition laws.

Many countries in the OECD Conference presented evidence that many customers are

reluctant to switch all or part of their business across different banks. This could be due to the

administrative difficulties encountered in altering direct electronic payment arrangements

and/or costs of establishing a reputation for creditworthiness which may be due to tying in

15 Koehler, Matthias. "Merger Control as Barrier to EU Banking Market Regulation." ZEW Discussion Papers, No. 07-082, 2007.16 Act against Restraints on Competition, 1998 (Germany), § 37 (3).17 European Commission Merger Regulations, No 139/2004 (Jan. 20, 2004), Article 3(5)(a).

18 Grave, Carston. "Merger Control in the Banking Sector during the Financial Crisis." Europäischer im Umbruch . Bonn: University of Bonn, 2010.


services done by banking companies.19 Such violation is termed as tying arrangement and

prohibited in almost all antitrust laws around the world.20

In a very recent case of anti-competitive agreements by Banking Companies in Turkey, it was

decided that Banking Companies were indulged in anti-competitive activities and liable to

pay certain fine.21 The TCA found that:

The maximum of the deposit interest rates and the increases in the credit rates are

being set by the banks in coordination;

The commercial banks are engaged in price coordination through the exchange of

information on the intended change in interest rates;

The publicly owned banks are engaged in coordinated bidding in the tenders for the

public deposits.22

ABUSE OF DOMINANT POSITION BY BANKING COMPANIES

An enterprise is generally considered to be dominant if it is able to act without taking account

of the reactions of its customers or competitors.23 Abuse of a dominant position occurs where

a firm holds a position of such economic strength that allows it to operate in a market without

being significantly affected by competition and it engages in conduct that is likely to impede

the development or maintenance of effective competition.24

For an example of abuse of dominant position by banking companies, banks provide long and

short term credits to customers, some of which can be called back at short notice, with

discretion by the bank. When a customer shifts to another bank for a new service the first

bank can make matters difficult for the customer. Customers may find it difficult to transfer

their accounts of different types from one bank to another. Incumbents may not share credit

19 OECD Secretariat. "Competition Issues and Remittances in Latin America (Supra n. 11).

20 See Northern Pacific Railway Co. et al. v. United States, 356 U.S. 1, 5-6 (1958); Consumer Online Foundation v. Tata sky Ltd & Ors., Case no. 2 of 2009, Competition Commission of India (March 2011).

21 Peskat, Istan. "Competition Law." Turkey: Competition Authority fines seven Banks for Anti-Trust Violations. March 12, 2013. http://mycompetitionlaw.info/news/turkey-competition-authority-fines-seven-banks-for-anti-trust-violations-380.html (accessed April 7, 2013).22 Ibid.23 See Hoffmann-La Roche & Co. v. Commission [1979] ECR 461; United Brands Co. v. Commission [1978] ECR 207.

24 Ramappa, T. Competition Law in India: Policy, Issues and Developments. London: Oxford University Press, 2009.


risks with new entrants, therefore a clear situation of market barriers for new entrants is

created which necessarily attracts competition law provisions.25

CHAPTER 2- BRINGING THE INDIAN BANKING SECTOR UNDER

COMPETITION ACT, 2002

The committee on Financial System (GOI 1991)26, with the objective to fabricate efficient,

prudent and internationality competitive system, suggested more market-friendly blue print

for first generation reforms of financial sector. The Committee on Financial Systems (GOI,

1998)27 suggested the road map for second-generation reform to keep pace with liberalization

of financial sector in other parts of the world. Keeping these recommendations in mind and in

order to pace with the global changes in banking liberalization, India has resorted to

liberalization and deregulated banking sector to cope with the ongoing reforms of real

sectors. Therefore, Indian market witnessed entry of many new Banks, which resulted in

competition in the market including anti-competitive activities. But from the year 2003

Competition Act came into force which is uniformly applicable to all sectors, hence it

becomes pertinent to analyze, if the scope of Competition Act extends to Banking Sector as

well.

ABSENCE OF MECHANISM FOR REGULATING COMPETITION IN THE BANKING SECTOR

Generally, financial regulations can be classified into prudential and systemic regulations.

Systemic regulations pertain to the safety and soundness of the overall financial system.

Prudential regulations aim to safeguard the safety and soundness of individual financial

institutions for the purpose of protecting consumers. Prudential regulation is an appropriate

legal framework for financial operations and it is a significant contributor to preventing or

minimising financial sector problems.28 The main statutes covering these regulations are

25 Kurkela, Matti. "Letters of Credit under International Trade Law: UCC, UCP and Law Merchant." The American Journal of Comparative Law, 145-152 : 2006.

26 Narasimham Committee. Review of the Financial System. Government, New Delhi: Government of India, 1991.

27 Narasimham Committee. Review of the Financial System. Government, New Delhi: Government of India, 1998.

28 Kanoria, Madhav V. "Application of Competition Law in the Banking Sector: A Global Perspective (Supra n. 12).


Banking Regulations Act29 (hereinafter BRA) and Reserve Bank of India Act30 (hereinafter

RBI Act).

As discussed above, the most anti-competitive activities in Banking Sector takes place in

form of mergers that affect competition at a later stage. Since 1961 till date, under the

provisions of the BRA, there have been as many as 77 bank amalgamations in the Indian

banking system.31

It would be observed that prior to 1999, the amalgamations of banks were primarily triggered

by the weak financials of the bank being merged, whereas in the post-1999 period, there have

also been mergers between healthy banks driven by the business and commercial

considerations.32 Due to the changing nature of banking mergers, Indian law has also been

triggered to regulate these mergers. The procedure for voluntary amalgamation of two

banking companies is laid down under Section 44-A of the BRA. After the two banking

companies have passed the necessary resolution proposing the amalgamation of one bank

with another bank, in their general meetings, by a majority in number representing two-thirds

in value of the shareholding of each of the two banking companies, such resolution

containing the scheme of amalgamation is submitted to the Reserve Bank for its sanction. If

the scheme is sanctioned by the Reserve Bank, by an order in writing, it becomes binding not

only on the banking companies concerned, but also on all their shareholders.33

Apart from these provisions of BRA, few other laws such as Companies Act34 and Takeover

Code35 are relevant in cases of Bank mergers and amalgamations.36 Section 391-396 of

Companies Act provides the machinery for the amalgamation of companies to be approved

by the company court and Central Government, but again these are merely regulatory

provisions. Still, these provisions do not touch upon the competition law aspect of these

mergers.

29 The Banking Regulation Act, 1949 (India).30 Reserve Bank of India Act, 1934 (India).

31 Indian Finance and Investment Guide. History of Banking in India. November 23, 2007. http://finance.indiamart.com/investment_in_india/banking_in_india.html (accessed April 6, 2013).32 Ibid.33 Banking Regulations Act, Section 44-A.34 The Companies Act, 1956 (India).35 The Takeover Code, 1997 (India).

36 Sahay, Ruchi. "Roles and Responsibilities of CCI in Bank Mergers: A Legal Perspective." CCI Internship Report, 2010.


Finally, based on the recommendations of the Working Group to evolve the guidelines for

voluntary merger between banking companies RBI had issued guidelines in May 2005 laying

down various requirements for the process of such mergers including determination of the

swap ratio, disclosures, the stages at which Boards will get involved in the merger process,

etc.37 But again these guidelines fall short of any competition regulation measures. Similarly

in case of abuse of dominant position and other anti-competitive agreements Indian law is

absolutely silent, thus a need exists to regulate competition in the banking sector as well.

EXTENDING THE COMPETITION ACT, 2002 TO THE BANKING SECTOR

It is apparent that Banking Companies can violate Competition laws, which is discussed in

initial part of this research. In this regard looking at the specific provisions of Competition

Act38 like tying violation39, abuse of dominant position40 and mergers41, it is further made

clear that these provisions are often attracted in banking sector as well. Hence in such a

condition Competition Act must be stretched to cover banking sector, because CCI is

nowhere explicitly barred from looking into banking sector.

If we take a look at the banking regulations, we will never find the word cartel, dominance, or

agreements in their legislations. Now if that is the case, it becomes obvious that asking the

RBI to deal with competition issues using banking regulations is a non-starter. The guidelines

of the RBI specify the prudential regulations with respect to bank mergers. They do not look

at the issues which the CCI looks at. As mentioned above, CCI is only authority that checks

whether a combination will likely result in dominance or likely facilitate cartelisation.

Moreover, RBI will not go further and assess whether a dominant position will be created or

whether cartelisation is likely, which is what CCI does.42 Hence, there is no point in limiting

jurisdiction of CCI and it must extend to banking sector.

37 Guidelines for Mergers/Amalgamations of Private Sector Banks, RBI/2004-05/462 Ref.DBOD.No.PSBS.BC.

89/16.13.100/2004-05 (May 11, 2005).38 Competition Act, 2002 (India).39 Ibid., Section 3(4)(a).40 Ibid., Section 4.41 Ibid., Section 5.

42 Mehta, Pradeep. "CCI has a Role to Play in Bank Mergers." CUTS CCIER Articles, 2012.


CHAPTER 3-CHALLENGES IN APPLYING COMPETITION ACT IN THE

BANKING SECTOR

Even after it is proved that Competition Act is applicable to banking sector and CCI should

have authority to regulate competition in the banking sector, still there are hurdles in making

it happen. Due to the recent crisis in banking industry and interference by CCI, this debate of

problems existing in application of Competition Act gains significance for the present

research. Some of the existing problems are discussed in this chapter.

CONFLICT BETWEEN ROLE OF RBI AND CCI

As already mentioned, that RBI is the authority which regulates bank mergers in India, if still

the competition aspect of these bank mergers is made subject to jurisdiction of CCI, it will

necessarily lead to a conflicting scenario between the two bodies. In this regard, the RBI has

urged the Ministry of Finance that the RBI alone should have sole jurisdiction over the bank

mergers and it should be outside the purview of the Competition Authorities, as the RBI has

the special knowledge required to regulate the banking sector.43 The RBI sought an

exemption, saying it has the expertise to deal with cartelisation, monopolistic behaviour or

unfair competition. In this regard the situation of conflict is very clear and a kind of overlap is

taking place in the roles of two bodies.

LACK OF EXPLICIT LAWS

The two main act applicable to present scenarios are BRA and Competition Act, but both

these acts are not explicit with regard to powers of CCI and RBI in case of competition

related issues in the banking sector. It is apparent from preamble of Competition Act that it is

not restricted from being applied to any sector including banking sector, while at the same

time major supervisory role is given to RBI under BRA for bank mergers. Thus, the situation

is not properly answered by the laws at hand, and both the bodies can subsume their

jurisdictions in the present scenario.

CONTROVERSIES SURROUNDING BANKING LAWS AMENDMENT BILL, 2011

The solution to the ongoing problem was attempted by passing Banking Amendments Act,

2011.44 Under the section 2 of this bill, CCI completely barred from interfering any of the

matters relating to banking sector. Thus, a situation of chaos took place and finally

43 ET Bureau. "CCI must scrutinise M&As in all sectors and coordinate with sectoral regulators." The Economic Times, 2012.44 The Banking Laws (Amendment) Bill, 2011.


Government has to put down this provision, thereby implicitly permitting the jurisdiction of

CCI to look into competition violations in the banking sector.45 With these changes

(removing the controversial clause that removed jurisdiction of CCI) the bill was passed from

the Lok Sabha, but it is again pending in the Rajya Sabha. Again, several controversies are

surrounding this bill in Rajya Sabha, and making further delay and hurdles in application of

Competition Act in the banking sector.

CONCLUSION: A WAY AHEAD

A distinction should be made between prudential regulation of banks by RBI and competition

regulation of the whole economy, including financial sector, by CCI. Since, Competition

regulation of M & As in the banking sector is a different matter than prudential regulations of

RBI. This is aimed at ensuring that banks compete among themselves in fighting for

customers by offering the best terms, lower interest rates on loans and higher interest rates on

deposits and securities. Therefore jurisdiction of CCI must be extended to cover banking

sector.

As there is a limited potential for conflict between prudential and competition policy goals

when it comes to mergers designed to shore up a failing or weakened bank. Even in such

cases, however, it will normally be possible to avoid competition problems by choosing the

right partner, or by structuring the merger so as to minimise its effects on local market

concentration. In any case, conflict between prudential and competition policy goals can be

reduced by close co-operation, including prior consultation between the pertinent agencies

(CCI and RBI). Therefore the bill pending in the Rajya Sabha should be passed without any

changes, so as the jurisdiction of CCI remains extended to cover the banking sector, because

it is of utmost important for the nation that banking sector works in a healthy manner with

good competitive spirit.

45 BT Online Bureau. "Lok Sabha passes banking bill, paves way for new licences." Business Today, 2012.


BIBLIOGRAPHY

ARTICLES

BT Online Bureau. "Lok Sabha passes banking bill, paves way for new licences."

Business Today, 2012.

Editorial. “End regulatory stasis: Empower or wind up the Competition Commission

of India.” Business Standard, 31 March 2011.

ET Bureau. "CCI must scrutinise M&As in all sectors and coordinate with sectoral

regulators." The Economic Times, 2012.

Kanoria, Madhav V. "Application of Competition Law in the Banking Sector: A

Global Perspective." CCI Internship Report, 2010.

Koehler, Matthias. "Merger Control as Barrier to EU Banking Market Regulation."

ZEW Discussion Papers, No. 07-082, 2007.

Kurkela, Matti. "Letters of Credit under International Trade Law: UCC, UCP and

Law Merchant." The American Journal of Comparative Law, 145-152 : 2006.

Mehta, Pradeep S. "Competition Law Regime in India: Evolution, Experience and

Challenges." Concurrences (Cuts International), 2006: 150-156.

Mehta, Pradeep S. “Will RBI be a better judge for banking mergers?” Business

Standard, 09 May 2012.

Mehta, Pradeep. "CCI has a Role to Play in Bank Mergers." CUTS CCIER Articles,

2012.

Motwani, Tejas K. "Analysis of Merger Control Under Indian Comopetition Law."

CCI Internship Report, 2011.

Panagariya, Arvind. “Competition Commission of India: A game changer.” The

Economic Times, 26 January 2010.

Sahay, Ruchi. "Roles and Responsibilities of CCI in Bank Mergers: A Legal

Perspective." CCI Internship Report, 2010.

Sinha, Ashok. “Don't keep bank mergers out of CCI purview.” The Hindu, 20

December 2011.

BOOKS

Dugar, S M. Guide to Competition Law. Nagpur: Lexis Nexis, 2010.

European Competition Commission. EU Competition Law: Rules Applicable to

Merger Control. Brussels: Eurpean Union, 2010.


Gupta, R K. Banking Law and Practice. New Delhi: Jain Book Agency, 2008.

Kumar, Abir Roy & Jayant. Competition Law in India. Kolkata: Eastern Law House,

2008.

Proctor, Charles. The Law and Practice of International Banking. London: Oxford

University Press, 2010.

Ramappa, T. Competition Law in India: Policy, Issues and Developments. London:

Oxford University Press, 2009.

Tannan, M L. Banking Law and Practice in India. Nagpur: Lexis Nexis, 2010.

ONLINE SOURCES

Indian Finance and Investment Guide. History of Banking in India. November 23,

2007. http://finance.indiamart.com/investment_in_india/banking_in_india.html

(accessed April 6, 2013).

Peskat, Istan. "Competition Law." Turkey: Competition Authority fines seven Banks

for Anti-Trust Violations. March 12, 2013. http://mycompetitionlaw.info/news/turkey-

competition-authority-fines-seven-banks-for-anti-trust-violations-380.html (accessed

April 7, 2013).

MISCELLANEOUS

Grave, Carston. "Merger Control in the Banking Sector during the Financial Crisis."

Europäischer im Umbruch . Bonn: University of Bonn, 2010.

Ongena, Elena Carletti & Steven. The Economic Impact of Financial Laws: The Case

of Bank Merger Control. PhD Thesis, Frankfurt: Center for Financial Studies, 2005.


Documents

Banking Final Draft-Hemant and Adarsh