Sri Lanka bank consolidation drive on hold

COLOMBO (EconomyNext) – A regulator-driven bank and finance company consolidation drive in Sri Lanka, is on hold following a change of administration, an official said.

"With the political changes, there has been an announcement that the government is reviewing the consolidation process," head of the Central Bank’s bank supervision department, Yvette Fernando said.

 A decision is awaited from the government, she said.

Sri Lanka’s Central Bank kicked off a drive to reduce the number of finance companies and smaller banks in a bid to create larger entities that would be more resilient to shocks and would also reduce the regulatory burden.

Though several finance companies have been merged with larger entities or banks, several which are considered to be undercapitalized are yet to be resolved.

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