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Consolidation has made progress as planned and last month almost all banks and finance and leasing companies (NBFIs) had finalised their consolidation plans and submitted the proposed merger and acquisition plans to the Central Bank, a Central Bank media release said.
These plans will now be reviewed by the Central Bank to enable the companies to proceed further.
Banks and NBFIs, while negotiating with the shortlisted merger and acquisition counterparts, also maintained a close dialogue with the special unit of the Central Bank.
The panel of audit firms continued their transaction management activities to facilitate the negotiation between financial institutions in an independent manner as directed by the Central Bank.
Work relating to the mergers that have already begun, such as DFCC Bank and the National Development Bank PLC, and Merchant Bank of Sri Lanka PLC, MBSL Savings Bank Ltd and MCSL Financial Services Ltd. continued to progress with the assistance of external consultants.
Approval of the Monetary Board was granted for Assetline Leasing Company Ltd. to acquire Lisvin Investments Ltd and for TKS Finance Ltd to acquire Asian Finance Ltd.
Several NBFIs falling within the same group also continued the consolidation while initial approval was granted for the mergers of a few other NBFIs as well.
The Monetary Board also approved funding for certain NBFIs through the Sri Lanka Deposit Insurance and Liquidity Support Scheme to further strengthen the financial status of the entities.
Such support will enable these entities to attract suitable merger and acquisition counterparts or strategic investors.
The Guidelines on taxation in terms of the Inland Revenue (Amendment) Act No 8 of 2014 and Value Added Tax (Amendment) Act No 7 of 2014 on the tax incentives to promote consolidation were also finalised and discussions with the Ministry of Finance and Planning are under way.
These guidelines are expected to be released to banks and NBFIs shortly.
