The banking sector serve as the backbone of an Indian economy as it facilitates channelizing the surplus public funds into the most productive channels, inculcating saving habits and accelerating the rate of capital formation. The Indian banking industry has witnessed the paradigm shift from traditional functioning of banks’ lending and borrowing to the modern banking which includes internet banking, mobile banking, micro-banking, Core Banking Solution (CBS), insurance and locker facilities so as to strengthen their financial system. In present scenario, the Indian banking industry has suffered many challenges in relation to their normal functioning of business such as booming of net loss, mounting of NPA, proliferating operating costs, erosion of net worth, intensifying unhealthy competition between public & private sector banks that necessities the Government of India announced Merger & Acquisition so as to revive the performance of Indian banking industry. The Merger & Acquisition in banking sector has bring the repositioning of financial structure base and integration of the Indian financial market with the global financial market through ameliorated operational efficiency, reduction of financial risk, access to expertise services, improvement of lending capacity and broadening the scope of financial inclusion services. The paper has made an attempt to investigate the impact of Merger and Acquisition on the efficiency of banks so as to find the areas that will need to be addressed at the time of proposed M&A of banks and also analysed the motive behind such forced Merger and Acquisition announced by the Government of India in the banking sector. For this purpose, the study has taken into consideration five variables for the comparative analysis capital, business, advances, deposit and net profit in the pre and post M&A of banks. The conclusion of study witnessed that merger and acquisition has positively influence the efficiency of banks.

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Keywords: Merger & Acquisition, Efficiency, Banking Sector, Growth, Indian Financial Market.