Agreeing with the Central Bank’s decision to reduce the number of independent players in the country, consolidation plans were submitted by all banks and non-banking financial institutions (NBFIs) last week to the Central Bank of Sri Lanka.

With these consolidation plans the entire banking and the finance sector will be restructured allowing mergers of banks and finance companies to steer the country towards the goal of a US$ 100 billion economy by 2016.

Becoming the first example for a merger DFCC Bank and the National Development Bank moved forward earlier this year and some 22 smaller private banks with less than Rs.100 billion in assets will merge before the deadline.

According to Central Bank, the state-run Bank of Ceylon and People’s Bank will be directed to expand their regional presence and operate with higher levels of capital. National Savings Bank is to broad-base its banking activities while new foreign banks will have to be locally incorporated commencing from the year 2016.The Merchant Bank of Sri Lanka PLC, MBSL Savings Bank Limited and MCSL Financial Services Limited have also initiated action on the merger of the three entities with the view of forming a single licensed finance company.