Canara Bank opts for acquisition.
By Vaibhav Aggarwal
Nov 23, 2009
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Canara bank pointed out that it was looking to acquire weaker banks to bolster its presence in Gujarat, Haryana and Maharashtra.

The bank's chairman and Managing Director, AC Mahajan said, "We have a deficient presence in Maharashtra, Haryana and Gujarat. We are looking at inorganic growth in these states."

He revealed that the bank had an internal team that would soon start the due diligence process of some potential targets and would later appoint consultants from outside to take care of the further process.

The chiefs of country's five leading public sector banks, including Mahajan had met finance ministry officials to discuss consolidation in banking industry. The government says that consolidation is essential for the economy.

Mahajan, on the sidelines of the meeting said that the banks were asked to give their views on consolidation.

Other banks that attended the meeting with Finance Minister Pranab Mukherjee included Punjab National Bank, Bank of India, Bank of Baroda and Union Bank of India.

Mahajan is the third public sector bank chief to express his inclination for an acquisition. Recently, Uco bank Chairman and Managing director SK Goel also indicated that the bank was considering acquiring a smaller bank.

The government is being cautious while pushing the consolidation agenda because it has been perceived as a sensitive issue. The smaller banks are apprehensive about losing their identities while bigger banks fear that the assets might become a liability for them in the long term.


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