Banks and finance companies in Sri Lanka were directed to merge with each other and take-over non-bank financial institutions (leasing and finance companies) in a bit to reduce the number of smaller institutions in the country.
"Satisfactory progress was made in the consolidation process during the month of April 2014," the Central Bank said in a statement.
"All banks and finance and leasing companies (NBFIs) submitted their broad plans on consolidation and greater participation in economic activities."
"The Central Bank reviewed the broad plans submitted by the banks and NBFIs and another round of one-on-one meetings are to be held with the respective banks and NBFIs to discuss these plans further."
Several non bank lenders within business groups have been given the nod to merge.
Banks and large non-bank lenders that have shown interest in merging with or acquiring smaller firms and have already started Board level discussions.
"To facilitate these discussions, due diligence and valuation reports of the respective NBFIs available with the Central Bank have been released to the interested parties, upon completing the necessary legal documentation," the Central Bank said.