The Central Bank has approved a total of 29 proposals of seven banks and 22 non-bank financial institutions (NBFI) under the ongoing financial sector consolidation programme.

Meanwhile, the Monetary Board, in principle, has approved another 10 consolidation proposals submitted by banks and NBFIs and the respective entities were proceeding with the merger/acquisition processes.

Further, the consolidation plans of seven NBFIs and one bank are being finalised and will be announced in the coming days, the Central Bank said.
Several banks and NBFIs namely, Asian Finance Ltd and TKS Finance Ltd, Capital Alliance Finance PLC and Cargills Bank Ltd, Commercial Credit and Finance PLC and Trade Finance and Investments PLC, Bartleet Finance PLC and Orient Finance PLC, Prime Grameen Micro Finance Ltd and Hatton National Bank PLC and Senkadagala Finance PLC and Newest Capital Ltd, have made public announcements of agreed consolidation arrangements.

The Central Bank also said the mergers of DFCC Bank, DFCC Vardhana Bank PLC and National  Development Bank PLC, as well as Merchant Bank of Sri Lanka PLC, MBSL Savings Bank Ltd and MCSL Financial Services Ltd, have continued to progress during the month with a view to completing the transactions by last quarter of this year.

Several other NBFIs were also proceeding with their consolidation plans, the Central Bank said.
Meanwhile, TPG Global LLC, a US-based global private investment firm, through its subsidiary a couple of weeks back committed a significant capital infusion to Union Bank of Colombo PLC.

“Considering the importance of having strong strategic partners to drive the consolidation process, the Monetary Board approved this investment,” the Central
Bank noted.

The monetary authority also said that the panel of audit firms compensated by them continued to assist in transaction management, by advising banks and NBFIs on transactions as well as on the smooth transition.

Meanwhile, 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 support the consolidation process are being finalised through stakeholder engagement.

“The Central Bank is closely monitoring the progress made by banks and NBFIs which are earmarked for consolidation and the timelines indicated in the consolidation plans with a view to expeditiously drive the financial sector consolidation programme,” the Central Bank said.