Suspend bank facilities to errant listed companies
Referring to recent reports on public listed companies not submitting financials, one of the best ways to regulate these errant companies is as follows: “If – for example – the audited annual financials are not provided within the stipulated period after the end of the financial year, withdraw all banking facility limits until submission for any public listed company.”
This initiative needs to come as a directive from the Central Bank (CB) to all financial institutions. The commercial banks then should meticulously follow the regulator instruction. The CB should monitor the actions taken by the banks by requesting for quarterly returns on non-compliance company details.
Ideally it may be applied for facility limits exceeding a certain pre agreed limit with one bank and aggregating total limit with all banks for the borrower.
Colombo banker