Mergers and acquisitions in the banking sector will be kept out of the purview of the Competition Act, the government has said. It will be regulated by the Banking Regulation Act, finance minister Pranab Mukherjee said on Saturday. The FM was speaking during an industry interaction organised by the CII here on Saturday. The Reserve Bank of India has asked the government to keep consolidation in the banking sector outside the competition law as it will not be easy for other regulators to understand the complexities of the sector.
The FM also said that GDP growth in 2010-11 has been swift and broad-based and that the economy is back on its pre-crisis growth trajectory. “Our tax revenue has grown at an exceptional rate and there has also been a sharp rebound in our exports,” he said, adding that the current account deficit is likely to be around the level in 2009-10 (2.9 per cent). “All this gives me the confidence to effect a sharp fiscal consolidation,” he added.
As far as borrowings are concerned, Mr Mukherjee said: “I have also kept the net market borrowing at `3.43 lakh crores of 2011-12 which is marginally lower in absolute term from the Budget estimate of 2010-11.” He said, “I am confident that the borrowing programme of the government, which will be finalised in consultation with the RBI, will be carried out in a non-disruptive manner.”