Financial Sector Consolidation Update – November 2014

December, 1, 2014

During the month of November 2014, further progress was made by banks and finance companies and leasing companies (NBFIs) on the financial sector consolidation process.

•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 Communications Department 29 November 2014 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. In this regard foreign banks expressed their commitment to operate as intermediaries of their entire international branch network to channel funds and expertise to several sectors of the economy.

•Consolidation process of 7 NBFIs has been completed and another 22 NBFIs and 4 banks are in progress for completion in due course. The names of such entities and the consolidation strategy are as follows:ggggggggg

 

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