Feb 28, Colombo: The progress in the consolidation of the financial sector to create a stable financial sector with strong and dynamic financial institutions has been satisfactory during the month of February 2014, the Central Bank said Friday.
Sri Lanka's Central Bank has initiated action on consolidating the financial sector as proposed in the 2014 budget by the President and presented in the Bank's Road Map for 2014.
According to a statement released by the Bank today, one-to-one meetings took place with regional representatives and senior management of foreign banks and the foreign banks agreed to play an increasingly active role in the economic activities of the country.
The process of finalizing the merger between the National Development Bank PLC and DFCC Bank under the initiative is progressing while the regulator, Securities and Exchange Commission and the Colombo Stock Exchange have agreed to set up a fast track process to facilitate the expected consolidations.
A framework for the carrying out of due diligence activities has been established, and the audit firms that are eligible to audit banks, finance and leasing companies (Non-Banking Financial Institutions) have commenced due diligence on the respective companies.
The officials of the Ministry of Finance and Planning and the Department of Inland Revenue have agreed to deal with the tax issues that are expected to arise consequent to the consolidation process. They are also drafting the required laws to give effect to the proposals announced in the budget.
The Bank said its officials participated at many knowledge sharing events on the subject of consolidation and the events have provided opportunities to clarify certain matters raised by stakeholders.
The Central Bank welcomed the positive sentiments expressed by the International Rating Agencies on the consolidation process.
The global rating agency, Fitch Ratings said Sri Lanka's plan to consolidate banks would boost economic development and raise systemic stability in long-term.
The Central Bank appreciated the reaction of certain international agencies that have conveyed their desire to provide advice and funding in the process of consolidation