Sri Lanka’s overcrowded finance company sector with 50 licensed non-bank finance institutions (NBFI) are to be strictly monitored by the Central Bank by strengthening the existing regulatory frame work, Central Bank (CB) Governor Dr. Indrajit Coomaraswamy told a media conference on the monetary policy review in Colombo on Thursday.
He noted that some of these NBFIs have to brace for tough times as a result of low capitalisation levels amid a challenging operating environment and unfavourable weather conditions and declining profitability due to higher funding and credit costs.
The CB will seek technical assistance to handle ailing finance companies, he said adding that a traffic light system will be introduced to issue prior warnings before the building up of pressure on capitalisation, he disclosed.
Dr. Coomaraswamy pointed out that they encourage shareholder-driven consolidation for small NBFIs and collapsed finance companies should be liquidated to repay the money of depositors.
Deputy Governor. C.J.P Siriwardane revealed that the CB issued a directive requiring all licensed finance companies to increase their minimum core capital levels to Rs.2.5 billion by end-2020 in stages from the current Rs.400 million, with the first target of Rs. 1 billion to be reached by next year.
He said that this will spur small companies to improve their capital buffers and may reignite industry consolidation.
Answering a question raised by a journalist on the entry of PayPal, Dr. Coomaraswamy said that “the Central Bank has no objections relating to the entry of PayPal in Sri Lanka. But they are not interested in carrying out their business in the country because our market is too small for them”. “We are not blocking their entry,” he added. (Bandula)
The Judicial Service Commission (JSC) has interdicted Colombo Fort Magistrate Kosala Senadheera.
Mr. Ali Sabri Rahim, a Member of Parliament (MP) for Puttalam District whom an open warrant had been issued, attended a public ceremony at Al Aksha National School in Kalpitiya today (16) as the special guest of honor.
The Supreme Court today refused interim relief in an application filed by President’s Counsel Senaka Walgampaya seeking an Order from the Supreme Court compelling the President to appoint judges to fill the existing vacancies in the Court Of Appeal.
Gazette on new speed limit regulations to be issued within two weeks
Two underworld criminals wanted for multiple crimes, including murder, were brought from Dubai to Sri Lanka, today (12).
Acting Attorney General Parinda Ranasinghe, was appointed as the Attorney General of Sri Lanka a short while ago.
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