Mergers and Acquisitions were the established norms for firms to achieve efficiency both financial and operational since long. Banks helped the mergers activity to take place by provisioning of credit facilities. But in order to cater the needs of challenges posed by internationalization banks themselves have to be efficient. Public sector banks in India have been consolidated quite a few times but recent mergers in Indian banking system led by State Bank of India and others have changed the objective of merger by consolidation into few large banks with large capital base. The purpose of this study is to investigate the impact of mergers on operational efficiency of merging banks using window period of one, two and three years by pre-post comparison of operating ratios namely Interest Income Per Employee, Interest Income Per Branch, Business Per Employee and Business Per Branch. The data analysis by Paired Sample t-test found Interest Income Per Employee improved significantly in third year post-merger in comparison to three years pre-merger.The similar result was repeated when data was analysed through Wilcoxon Signed Rank Test and Sign Test for the same window period. Business per Employee Improved in window period of one year post-merger in comparison to one year pre-merger according to all statistical tools namely, Paired Sample t-test, Wilcoxon Signed Rank Test and Sign Test respectively. Again Business Per Employee improved significantly in third year pre-post window by all the three tests employed in this study. I
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