Friday, 22 May 2020 18:34

Central Bank cancels 82 year old The Finance Company licence

The Finance Company PLC (TFC) has finally lost the license granted by the Central Bank to continue as a non banking financial institution in the country with effect from today Monday 22 the company failed find an investor to infuse capital since 23rd October 2019.

The Monetary Board of the Central Bank has allowed TFC to call for a fresh round of Expression of Interests to identify a credible investor with valid proof funds and a viable business restructuring plan to revive the operations of the company.

But TFC failed to identify such investor up to date. Therefore, the MB decided to cancel the finance business licence issued to TFC, in terms of the Finance Business Act (FBA ) with effect from 22nd May 2020

The Finance Company, carried out its finance business activities under FBA and was severely impacted by the failure of a number of financial institutions within the Ceylinco Group in 2008.

The Monetary Board of the Central Bank of Sri Lanka (MB) issued a Notice of Cancellation (NOC) of the finance business licence issued to TFC, in terms of the powers vested under the FBA, with effect from 23rd October 2019, in order to safeguard the interests of the depositors and other stakeholders of TFC.

TFC had failed to tender a valid objection to the MB against such NOC within the stipulated time in terms of the provisions available in FBA. Accordingly, licence of TFC can be cancelled after 21st December 2019 onwards in terms of the FBA.

However, upon the request of the company, the MB allowed TFC to call for a fresh round of Expression of Interests to Department of Supervision of Non-Bank Financial Institutions 22nd May 2020.

This approval was given to identify a credible investor with valid proof funds and a viable business restructuring plan to revive the operations of the company but TFC failed to identify such investor up to date.

Therefore its license to operate as a finance company has been cancelled.. The Sri Lanka Deposit Insurance and Liquidity Support Scheme of the CBSL will take necessary actions to pay compensation to the insured depositors under the applicable laws and regulations.

(LIN)

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