Dec 05, Colombo: The monetary authority of Sri Lanka will not issue licenses for new finance companies and has encouraged the weaker finance companies to merge with stronger ones and consolidate.
Governor of Central Bank Ajith Nivard Cabraal has told a forum of finance company executives that the monetary board has decided not to issue any new licenses to finance companies in the near future, unless absolutely necessary.
Addressing the Chairmen, Directors and Chief Executive Officers of Licensed Finance Companies (LFCs) and Specialized Leasing Companies (SLCs) Tuesday at the 5th Annual Directors' Symposium for Non-Bank Financial Institutions (NBFI), Cabraal said that the decision was taken in the best interests of the depositors.
"The Central Bank is encouraging weaker finance companies to merge and consolidate with stronger ones. Weak companies cannot remain as weak companies," the Governor told the forum.
The finance and leasing sector has recorded a robust growth recently after a difficult period in 2009 due to the relaxed monetary policies.
The Governor delivered the keynote address at this year's symposium under the theme "Positioning the Non-Banking Sector for the post $4K era".