DFCC amendments soon before Parliament ahead of merger
Amendments allowing DFCC Bank’s impending merger with NDB is slated to go to Parliament by next week for approval, industry sources said.
“These amendments will facilitate DFCC to become a company, thereby aiding the merger with NDB, which is at its last stage,” an industry source told the Business Times. He added that this will be similar to the Parliamentary approval sought to enable NDBto get incorporated under the Companies Act, to facilitate the merger with NDB Bank some years ago.
“This is required by the Central Bank to issue it a commercial banking license. A development banking licence will be withdrawn, later this year,” he said.
Both NDB and DFCC announced in a joint announcement in July stating that they have engaged Boston Consulting Group (BCG) India as their consultants to assist with the merger.
Meanwhile on the financial sector consolidation front, the Central Bank (CB) has to approve only eight more consolidation plans and then the entire plan would be completed, CB officials said.
“There’re some eight more parties lined up for approval, while 37 consolidation proposals have already been approved,” C.J.P. Siriwardene, Assistant Governor CB told the Business Times. He said that proposals for consolidation were different; some were absorptions, some were acquisitions and others were mergers.
CB sources said that the regulator will be gradually removing licences (of those firms which got absorbed, acquired and merged) within the first half of next year. Some approvals will be granted at tomorrow’s Monetary Board Meeting.
They added that the regulator is in discussion with three foreign investors in a bid to restructure the failed CIFL (Central Investments and Finance Ltd), and another finance company is also in talks with foreign parties to bail them out.