July 01, Colombo: Sri Lanka's Central Bank said almost all banks and non-banking financial institutions (NBFIs) that include finance and leasing companies had finalized their consolidation plans and submitted their proposed merger/acquisition plans to the Bank.
Updating the progress on the financial sector consolidation during the month of June, the Central Bank said consolidation process had made progress as planned.
"These plans will now be reviewed by the Central Bank with a view to facilitating the respective companies to proceed further," the Central Banks said in a statement Monday.
Banks and NBFIs, while negotiating with the shortlisted merger/acquisition counterparts, also have maintained a close dialogue with the special unit of the Central Bank.
In addition, as requested by the Central Bank, the Panel of Audit Firms have continued their transaction management activities to facilitate the negotiation process between financial institutions in an independent manner.
The DFCC Bank and the National Development Bank PLC were working on a merger, while Merchant Bank of Sri Lanka, MBSL Savings Bank and MCSL Financial Services, were progressing in their merger with the assistance of external consultants when necessary.
Meanwhile, the Monetary Board has granted approval for Assetline Leasing Company Ltd. to acquire Lisvin Investments Ltd and for TKS Finance Ltd to acquire Asian Finance Ltd.
At the same time, several NBFIs falling within the same group also continued the consolidation process while initial approval was granted for the mergers of a few other NBFIs as well.
The Monetary Board also has approved providing funding support to certain NBFIs through the Sri Lanka Deposit Insurance and Liquidity Support Scheme in order to further strengthen the financial condition of those entities.
The Guidelines on the tax incentives to promote the consolidation process were also finalized, and discussions with the Ministry of Finance are currently underway, the Central Bank said. These guidelines are expected to be released to banks and NBFIs shortly.
During the month, the Central Bank has also continued to maintain a close dialogue with all stakeholders of the process, including having a discussion with the representatives of the Ceylon Bank Employees' Union.