Bank consolidation continues

Further progress was made by banks and finance companies and leasing companies (NBFIs) on the financial sector consolidation process last month, the Central Bank said in a media release.

The proposed amalgamation of the Merchant Bank of Sri Lanka PLC, MCSL Financial Services Ltd and MBSL Savings Bank Ltd has reached the final stage of completion.

The shareholder approvals have been obtained and the merged entity will operate as a licensed finance company from 2015.

The Act to facilitate the proposed merger of the three banks, viz., DFCC Bank, National Development Bank PLC and the DFCC Vardhana Bank PLC has been enacted.

Meanwhile, the Ministry of Finance will issue the Gazette notification in relation to exemption of stamp duty for the issue of share certificates for mergers and acquisitions under the financial sector consolidation process.

One-on-one meetings chaired by the Governor of the Central Bank were held with foreign banks to discuss the progress made on their expected contribution under the financial sector consolidation process.

Several regional representatives of foreign banks were also present at the meetings.

Foreign banks in Sri Lanka are expected to demonstrate a greater participation in economic activities and to make a significant contribution to the economy.

In this regard foreign banks expressed their commitment to operate as intermediaries of their international branch network to channel funds and expertise to several sectors of the economy.

The consolidation process of seven NBFIs has been completed while in another 22 NBFIs and four banks the process is continuing and will to be completed soon.