The government has proposed that mergers taking place in the banking sector should be kept out of the domain of Competition Commission of India (CCI). It means that mergers between banks will not be supervised or regulated by the competition watchdog, Competition Commission of India.

Reportedly, the government will back its proposal of not including mergers amongst banks in the ambit of CCI, in the Banking laws (amendment) Bill 2011. According to senior officials, no modifications will be made in the proposal, when Finance Minister P. Chidambaram furthers the amendments to the Banking Laws (amendment) Bill.

In simple words, it means that only Reserve Bank of India will be regulating the mergers between banks. There will be no need to apply for approval of Competition Commission of India, if the proposed bill gets passed in the parliament.

It should be noted that recently Lok Sabha passed the debt recovery bill but, the banking laws (amendment) bill is yet to be passed.