‘Mergers on a voluntary basis’ -Weerakkody

[BackstageTop contributor]

‘Mergers on a voluntary basis’ -Weerakkody
Hiran H.Senewiratne (hsenewiratne@gmail.com)
Dinesh Weerakkody

Sri Lanka’s financial sector consolidation process through mergers and acquisitions, which was initiated by the previous government should not be forced but needs to be a voluntary exercise for banking and financial sector entities to pursue, top economist Dinesh Weerakkody said.

“My personal opinion is that this should be a voluntary exercise but not a forced one. A committee has been appointed to look into this matter, which is also looking at the non- banking sector as well. The committee’s report will be handed over to Prime Minister Ranil Wickremesinghe today,” Weerakkody told the Daily News business.

Weerakkody, the former Commercial Bank Chairman now functions as a consultant of the Policy Planning and Economic Development Ministry and is currently heading the committee to look into the viability of the financial sector consolidation process. The committee was appointed by Prime Minister Ranil Wickremesinghe.

Financial sector consolidations cannot be implemented within the100 day plan of the government because it needs more time and planning under the government’s financial sector reforms, he said.

Further, he will also be looking and studying on the merger of National Development Bank and DFCC and Vardhana Bank. Because with the merger everybody is uncertain of the status of the entity because to find a brand name for the new entity.

Some bankers criticized the previous Central Bank Governor complaining that the consolidation process was forced on them and did not have a long-term financial reform plan.

TheCentral Bank initiated action on consolidating the financial sector as proposed in the 2014 budget by the former President and presented in the Bank’s Road Map for 2014.

A top Central Bank official told Daily News business the consolidation process will resume under the new government’s economic policy in a more planned and systematic way as a long term economic policy.