The Ministry of Corporate Affairs, Government of India (MCA), has through a notification published on August 30th, 2017, exempt reconstitution, transfer of whole or any part thereof and amalgamation of nationalised banks under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, from merger control scrutiny for a period of 10 years (Notification).
The latest addition to the string of changes introduced by the Ministry of Corporate Affairs (MCA) this year is an exemption to Regional Rural Banks (RRBs) from the applicability of the merger control regime. The MCA introduced a notification on August 10, 2017 (Notification), which stipulates that Sections 5 and 6 of the Competition Act, 2002 (Act), which relate to regulation of combinations, will not apply to amalgamations of RRBs for which the Central Government has issued a notification under Section 23A(1) of the Regional Rural Banks Act, 1976 (RRB Act). This exemption is applicable for a period of five years, i.e., until August 9, 2022.
The RRB Act was enacted to provide for the incorporation, regulation and winding up of RRBs in order to develop the rural economy and particularly enhance the credit facilities available to marginal farmers, agricultural labourers, artisans and small entrepreneurs. Under section 3(1) of the RRB Act, the Central Government can establish a RRB in any state or union territory, upon a request being made by a bank that proposes to sponsor the RRB.
Keeping with the slew of changes introduced this year, the Ministry of Corporate Affairs, Government of India (“MCA”) has yet again altered the Indian merger control regime, by doing away with the mandatory 30 day deadline for filings notifications, post the trigger event. This brings the Indian merger control regime in sync with most mature competition law regimes, which do not have a fixed timeline within which a merger notice must be filed with the regulator.
By virtue of its powers under Section 54 of the Competition Act, 2002 (“Act”), which allows the Central Government to exempt the applicability of any of the provisions of the Act for a specified period, the MCA has introduced a notification on June 29, 2017 which exempts an enterprise, from filing a notice within 30 days, for a period of five years, i.e., until June 28, 2022 (“Notification”).