Monday 1 December 2014

Progress in NBFI consolidation

Further progress has been made by banks and finance companies and leasing companies (NBFIs) on the financial sector consolidation process during November 2014.

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 necessary shareholder approvals were 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, was enacted.

The Ministry of Finance has made arrangements to issue the Gazette Notification in relation to exemption of Stamp duty for issue of share certificates for mergers and acquisitions under the financial sector consolidation process. One-to-one meetings chaired by the Governor of the Central Bank were held with the 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 these meetings.

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

Consolidation process of seven NBFIs has been completed and another 22 NBFIs and four banks are in progress for completion in due course. 
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