Mar 01, 2014 (LBO) - Books of Sri Lanka's banks and finance companies are being evaluated by audit firms as they are moving towards mergers under a regulatory push, the Central Bank said.
"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 (NBFIs) have commenced due diligence on the respective companies," the regulator said.
Companies have to be valued for mergers and their assets and liabilities checked.
Work was in progress on a merger between National Development Bank and DFCC Bank, the Central Bank said.
Sri Lanka's Central Bank is pushing consolidations in a bid to make banks bigger and less vulnerable to shock reduce the number of smaller non-bank finance companies in operation and fix several troubled ones.
The Central Bank said one-to-one meeting have been held with representatives of foreign banks who have "agreed to play an increasingly active role in the economic activities of the country."
The Securities and Exchange Commission and Colombo Stock Exhange had set up a "fast track process" to facilitate mergers. Almost all private domestic banks are listed.
The ministry of finance and inland revenue department have agreed to deal with tax issues that expected in the consolidating lenders, the Central Bank said.
The regulator said some international agencies "had conveyed their desire to provide advice and funding in the process of consolidation", without naming any lenders or agencies.
"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 (NBFIs) have commenced due diligence on the respective companies," the regulator said.
Companies have to be valued for mergers and their assets and liabilities checked.
Work was in progress on a merger between National Development Bank and DFCC Bank, the Central Bank said.
Sri Lanka's Central Bank is pushing consolidations in a bid to make banks bigger and less vulnerable to shock reduce the number of smaller non-bank finance companies in operation and fix several troubled ones.
The Central Bank said one-to-one meeting have been held with representatives of foreign banks who have "agreed to play an increasingly active role in the economic activities of the country."
The Securities and Exchange Commission and Colombo Stock Exhange had set up a "fast track process" to facilitate mergers. Almost all private domestic banks are listed.
The ministry of finance and inland revenue department have agreed to deal with tax issues that expected in the consolidating lenders, the Central Bank said.
The regulator said some international agencies "had conveyed their desire to provide advice and funding in the process of consolidation", without naming any lenders or agencies.
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