The Central Government along with the Reserve Bank of India has taken various reform measures from time to time to build a strong and robust banking sector and make it less vulnerable to the external shocks. One of the most important reform measures is the Consolidation of the banks. This process of the integration is not new to the banking industry as the very first merger took place several years down the history.The most significant merger in the pre-independence time was of the three presidency banks: Bank of Madras, Bank of Bombay and Bank of Bengal in1935 to establish the Imperial Bank of India which was later renamed as State bank of India in 1955.In 1993 the first merger between the two PSBs took place wherein the New Bank of India is merged with Punjab National Bank, resulting in reduction of the number of nationalized banks from 20 to 19. The concept of the mergers and acquisitions in the banking industry regained importance in the current scenario with the merger of the Associate banks of SBI and Bharatiya Mahila Bank with SBI followed by the launch of mega merger drive in 2019.  The merger process can either be the voluntary or compulsory depending on the requirements of the country at that time. Earlier mergers were basically used as a tool to consolidate the weaker banks into strong banks to give new life to the weak banks, but later on the trend changed and numerous voluntary mergers took place with the objective to reap the benefits of the integration. The launch of the scheme of the mergers and acquisitions of the banks brings an impact not only on the banks involved in the process but also on the economy as a whole. Therefore, it becomes imperative to study the impact of such decisions on the financial health of the banks. The CAMELS ratings is the supervisory rating system which was originally developed in the U.S to examine the soundness of the banking system. In India, The High Level Steering Committee was constituted in the year 2011 to review the supervisory processes of the commercial banks recommended its application in the country. The present paper focus on the study of the concept of the mergers and latest trends of the mergers in Public sector banks. The CAMELS analysis is also studied in detail in the case of merger of BANK OF BARODA, VIJAYA BANK AND DENA BANK.

KEYWORDS: Mergers and Acquisitions, CAMELS, CAR, Liquidity Ratios, Sensitivity Analysis.