Window for consolidation in new amendments to Banking Act

Proposed and pending amendments to the Banking Act this year are expected to provide a window of opportunity for mergers and acquisitions within the financial services industry, according to Central Bank sources.

“The amendments to the Banking Act have been finalised with provisions to enable the consolidated supervision of banking groups, facilitate mergers and acquisitions for the consolidation of the banking industry and strengthen bank resolution measures,” stated the Central Bank’s Financial System Stability Review 2010 released on Tuesday.

It said proposed amendments include powers for the regulator to conduct the consolidated supervision of banking groups, provisions to facilitate consolidation through mergers and acquisitions of licensed banks, provisions to strengthen the bank resolution measures and certain changes necessitated by the new Companies Act.

The Central Bank discussed the proposed amendments with the banking sector and the revisions are expected to come into effect in 2011, the review added.