Mergers in the Indian Banking Sector under AS-14 and IFRS-3: A Comparative Analytical Study

The Indian banking sector has experienced substantial consolidation over the past decade in response to escalating non-performing assets, capital adequacy pressures, governance concerns, and regulatory reforms. This research critically examines the accounting treatment of major banking mergers under Accounting Standard 14 and IFRS-3, implemented in India through Ind AS-103. The study evaluates differences in valuation methodology, goodwill recognition, impairment testing, reserve treatment, and disclosure requirements, and analyses their impact on financial transparency, capital adequacy representation, and stakeholder confidence. A descriptive and analytical research design is adopted using secondary data drawn from annual reports and regulatory disclosures of State Bank of India, Bank of Baroda, Punjab National Bank, and HDFC Bank. The findings indicate that book value accounting under AS-14 often deferred recognition of embedded credit risk, whereas acquisition-based fair value accounting under IFRS-3 improved early risk identification and comparability. Although IFRS-3 may introduce short-term earnings volatility due to impairment adjustments, it enhances long-term governance quality, regulatory alignment, and investor trust. The study concludes that fair value-based acquisition accounting provides a more transparent and reliable framework for large-scale banking mergers in India