Sarva Haryana Gramin bank and Punjab National Bank
Case brief
What is this about?
The Commission imposed a penalty on Sarva Haryana Gramin Bank and Punjab National Bank for failing to file a notice and consummating a bank amalgamation before the statutory period expired, despite having earlier received approval for the combination.
What did the court decide?
INR 1,00,000/- penalty imposed on the Parties, payable within sixty days.
What the court decided
COMPETITION COMMISSION OF INDIA (Combination Registration No. C-2015/12/344)
14.02.2017
Fair Competition For Greater Good
Notice given by Sarva Haryana Gramin Bank and Punjab National Bank
Order under Section 43A of the Competition Act, 2002 (“Act”)
- The Competition Commission of India (“ Commission ”), in its Special Meeting held on 10.02.2014, took cognizance of information received in respect of amalgamation of Gurgaon Gramin Bank (“ GGB ”) (sponsored by Syndicate Bank ) and Haryana Gramin Bank (“ HGB ”) (sponsored by Punjab National Bank) into Sarva Haryana Gramin Bank (“ SHGB ”) and designation of PNB as the sole sponsor bank of SHGB (“ Combination ”). The Combination came into effect from 29.11.2013 vide a Gazette of India Notification dated 29.11.2013 issued by the Department of Financial Services, Ministry of Finance, Government of India (“ DFS ”) under sub-section (1) of Section 23A of the Regional Rural Banks Act, 1976 (“ RRB Act ”) (“ Notification ”).
- Accordingly, letters were sent to the SHGB and the DFS on 17.02.2014 directing them to intimate the reasons as to why an inquiry under sub-section (1) of Section 20 of the Act should not be commenced. The Commission received replies from SHGB and DFS on 20.02.2014 and 21.03.2014 respectively.
- The Commission considered the replies of the DFS and SHGB in its Special Meeting held on 12.05.2014 and decided that the Combination meets the thresholds prescribed under the Act and is notifiable. Accordingly, vide letter dated 28.05.2014, SHGB and DFS were directed, under sub-section (1) of Section 20 of the Act read with Regulation 8 of the Competition Commission of India (Procedure in regard to the transaction of business relating to Combinations) (“ Combination Regulations ”), to file a notice in respect of the Combination. SHGB and the DFS filed additional responses on 13.06.2014 and 28.08.2014 respectively. The matter was again considered by the Commission in its meeting held on 15.09.2014 and 20.10.2014 and the Commission
Issues for consideration
3 issues framed by the court
Whether failure to file notice and consummating combination before commission approval attracts penalty under Section 43A despite earlier approval under Section 31.
Whether intra-group merger exemption applies where one of the original banks ceased to exist and control changed.
Whether parties to the combination can be identified as the resulting entity and the sole sponsor bank.
Parties & counsel
- petitioner
Fair Competition For Greater Good
- respondent
Sarva Haryana Gramin Bank
- respondent
Punjab National Bank
Case details
As recorded by the court registry
All orders in this case
2 orders share this CNR
- Order 1
- Order 2 — this page
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