Sri Lanka is planning to reduce the 58 Non Banking Financial Institutions (NBFI) operating in the Island to just 20 to enhance the sector's resilience to face internal and external shocks, announced Central Bank Governor Ajith Nivard Cabraal.
Accordingly, Central Bank is asking larger NBFI’s to acquire or merge with smaller financial institutions and small NBFIs are being encouraged to merge with one another to create large firms.
Authorities are also encouraging Licensed Banks to acquire NBFIs.
“A corporate group will be allowed to operate only one NBFI after end June 2014″, said Nivard Cabraal.
Central Bank is also asking new investors, banks or large NBFIs to acquire negative net worth NBFIs or selected lowly capitalized financial institutes with the new equity investments made directly into the negative net worth NBFIs or selected lowly capitalized NBFIs in order to supplement the capital of such NBFIs.
“When a new investor makes an equity investment of that nature, a matching long term advance will be made through the Sri Lanka Deposit Insurance and Liquidity Support Scheme on concessionary terms”, announced Cabraal.
Central Bank says when the consolidation process is completed by the year 2018 as planned, each Non Banking Financial Institute will have an asset base of Rs. 20 billion.
www.news360.lk
No comments:
Post a Comment