By Azhar Razak
Sri Lanka’s financial sector regulator, the Central Bank of Sri Lanka (CBSL) has appointed its nine-member accredited panel of auditors with the responsibility of performing a valuation, information memorandum and vendor due diligence on the 38 Non-Bank Financial Institutions (NBFI), an Assistant Governor of CBSL said last week. According to C. J. P Siriwardene, the panel of auditors have been tasked to submit a report to the CBSL by mid- March 2014 so that it could help determine pricing for potential buyers from Category A (Banks and the larger NBFIs).
“Since we will be paying for the services of the auditors, we will keep the report with us but will share the information with potential buyers on request,” Siriwardena said.
The CBSL has given a time period of until March 31, 2014 for local banks and category A NBFIs to identify partners of their choice from within the category B NBFI for such mergers/absorptions.
The consolidation approach the Central Bank recently put forward has directed 19 Category A Non Bank Financial Institutions (NBFIs) to discuss with 38 Category B NBFIs and identify merger partners and agree terms and conditions for Mergers/Absorption. The plan also says that all 38 Category B NBFIs has to merge either with local banks or merge amongst themselves so that they fulfill conditions of category A NBFIs.
According to the CBSL, Category A NBFIs are defined as those with assets more than Rs.8 billion, core capital more than Rs.1bn and those who have a high degree of compliance issued by CBSL. Those in the category B have been defined as those Licensed Finance Companies (LFC) or Specialised Leasing Companies (SLC) or groups of LFCs and/or SLCs that do not fulfill one or more of the criteria of the category A.
Sri Lanka’s financial sector regulator, the Central Bank of Sri Lanka (CBSL) has appointed its nine-member accredited panel of auditors with the responsibility of performing a valuation, information memorandum and vendor due diligence on the 38 Non-Bank Financial Institutions (NBFI), an Assistant Governor of CBSL said last week. According to C. J. P Siriwardene, the panel of auditors have been tasked to submit a report to the CBSL by mid- March 2014 so that it could help determine pricing for potential buyers from Category A (Banks and the larger NBFIs).
“Since we will be paying for the services of the auditors, we will keep the report with us but will share the information with potential buyers on request,” Siriwardena said.
The CBSL has given a time period of until March 31, 2014 for local banks and category A NBFIs to identify partners of their choice from within the category B NBFI for such mergers/absorptions.
The consolidation approach the Central Bank recently put forward has directed 19 Category A Non Bank Financial Institutions (NBFIs) to discuss with 38 Category B NBFIs and identify merger partners and agree terms and conditions for Mergers/Absorption. The plan also says that all 38 Category B NBFIs has to merge either with local banks or merge amongst themselves so that they fulfill conditions of category A NBFIs.
According to the CBSL, Category A NBFIs are defined as those with assets more than Rs.8 billion, core capital more than Rs.1bn and those who have a high degree of compliance issued by CBSL. Those in the category B have been defined as those Licensed Finance Companies (LFC) or Specialised Leasing Companies (SLC) or groups of LFCs and/or SLCs that do not fulfill one or more of the criteria of the category A.
http://www.nation.lk/edition/biz-news
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