Sri Lanka Central Bank has said that no new finance company licenses will be issued. In a statement by the bank it was added that an asset management company to take over bad debts and inject capital into troubled finance companies with state and investor support is being worked out.
“The Central Bank has now set up a new “Resolution Division” to take all necessary measures to address financial problems of these companies expeditiously. This specialized Division will help the Monetary Board to implement necessary policy measures on a fast track basis. A new set of regulatory and supervisory measures will be introduced in due course in line with the above joint initiative.
“The examination and supervision methodology has already been revisited to assess the financial condition and the business models of the regulated entities by focusing on material risks to their future sustainability of businesses in place of the history-based assessment. In this context, the respective Boards of Directors will be directly responsible for early resolution of supervisory concerns over such risks,” the Central Bank stated.