MARKET EYE-Indian small lenders gain; bank bill sparks M&A hopes

Wed Dec 19, 2012 12:04pm IST

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* Shares in India's smaller private sector banks gain on hopes
the banking amendment bill approved by parliament on Tuesday
will spark consolidation in the sector.
* The bill lays the groundwork for non-banking financial
companies to win banking licences, sparking speculation they
could look to purchase smaller lenders to expand their footprint
in the sector. 
* "We think there is a high possibility that many of the new
banks could consider acquiring older, smaller banks with large
distribution networks such as Karnataka Bank, Federal Bank,
etc," Bank of America Merrill Lynch said in a report. 
* Dhanlaxmi Bank gains 3.4 percent, Karnataka Bank
 gains 4.3 percent while Federal Bank is up
4.4 percent.

 (abhishek.vishnoi@thomsonreuters.com /;
abhishek.vishnoi.reuters.com@reuters.net)
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