Central Bank to resurrect six finance companies
The Central Bank has taken steps to resurrect six finance companies faced with serious financial crises to provide loans against their immovable assets.
Under this programme as a first step by keeping immovable assets of the Industrial Finance Company through the Seylan Bank one hundred and twenty million (120 million) rupees would be given next week, Deputy Head of the Central Bank of Sri Lanka K.G.D.D. Dheerasinghe said at a press conference held yesterday at the Bank Headquarters.
Loans to finance companies are issued under the special loan covering system of the Central Bank.
Mr. Dheerasinghe said that in addition to the Industrial Finance Company the Central Bank is planning to help five other finance companies saddled with chronic finance crisis against their immovable assets through commercial banks.
Loans given to finance companies and leasing companies should be used only to settle the day to day transactions and to carry on the business activities uninterrupted and this money should not be used to repay the deposits.
Act to protect investors
The Central Bank is to take measures to repeal the prevailing Finance Companies Act to crack down illegal financial institutions operating in the country in light of the now infamous Sakvithi scam. An official at the Central Bank said the bank would repeal the prevailing Finance Companies Act by December this year.The proposed ‘Finance Business Act’ would be implemented to crack down illegal financial institutions and to protect investors from scams such as Sakvithi.
Sakvithi Ranasinghe, an English tutor carried out a financial scam which duped over 1000 depositors involving millions of rupees. An INTERPOL warrant is now out for his arrest.
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