9 Licensed Finance Companies face regulatory pressure

9 Licensed Finance Companies face regulatory pressure

9 Licensed Finance Companies face regulatory pressure

The Central Bank of Sri Lanka regulates and supervises Licensed Finance Companies in terms of provisions of the Finance Business Act No. 42 of 2011 and Directions issued thereunder to promote safety and soundness of the overall financial sector. However, issuing a special public notice yesterday (14) the Central Bank of Sri Lanka stated that regulation and supervision of the bank does not necessarily prevent the failure of any financial institution, including Licensed Finance Companies.

Meanwhile, the Central Bank of Sri lanka stated that eight licensed finance companies, Arpico Finance Company Public limited company, Associated Motor Finance Company Public limited company , Bimputh Finance Public limited company, Kanrich Finance Limited, Merchant Bank of Sri Lanka & Finance Public limited company, Richard Pieris Finance Limited, Softlogic Finance Public limited company and UB Finance Company Limited found non compliant with the minimum capital adequacy requirement and has been given time extension to rectify the non compliance.

Moreover, the Central Bank of Sri lanka stated that Nation Lanka Finance Public limited company  is found to be in non compliance with the  minimum capital adequacy requirement and the licensed finance company is yet to submit a feasible capital augmentation plan.

The Central Bank further noted that Licensed Finance Companies that are non compliant with minimum capital adequacy requirement are indicated in the notice as it poses a signifi­cant risk to the depositors. Hence, public is advised to exercise due care when making deposits in Licensed Finance Companies to ensure the safety of their funds and also to refrain from depositing funds in unauthorized institutions/persons.

The public notice as follows :-

9 Licensed Finance Companies face regulatory pressure

See more articles – https://21newslk.com/2020/10/15/cabinet-approval-to-amend-intellectual-properties-act/

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