CB says no favouritism in the financial sector consolidation process
View(s):The Central Bank has denied claims of favouritism in the implementation of the financial sector consolidation process stating that no finance company will be allowed to continue without merger or absorption.
Assistant Governor of Central Bank C.J.P. Siriwardena told the Business Times that they will stick to the master plan on consolidation of the financial sector.The consolidation process is on track to reduce the number of non-banking financial institutions to 20 from 58, he said, adding that the merger or acquisition of these financial institutions is mandatory in accordance with the plan
He was responding to the allegation leveled by certain finance companies that at least 10 financial institutions are to be allowed to continue its functions hindrance.Mr. Siriwardena noted that no such approval has been given to any financial institution to continue without merger or absorption surpassing the guidelines of the master plan. However he pointed out that he Central Bank has the power to issue directions exempting any financial institution from this mandatory requirement.
Several finance companies expressed dismay on a ‘decision’ to allow three finance companies to continue as micro finance companies without merging.