An exercise is going on in Sri Lanka where books of banks and finance companies are being evaluated by audit firms as part of the initiative to merge them through a regulatory effort. The central bank said a framework for the carrying out due diligence activities has been established, and the audit firms that are eligible to audit banks, finance and leasing companies have commenced due diligence on the respective companies. Companies have to be valued for mergers and their assets and liabilities checked. Work was in progress on a merger between National Development Bank and DFCC Bank. The central bank is pushing consolidations in a bid to make banks bigger and less vulnerable to shock and reduce the number of smaller non-bank finance companies in operation and fix several troubled ones. The Securities and Exchange Commission and Colombo Stock Exhange had set up a fast track process to facilitate mergers.
