Monetary Board Archives

December 29, 2022

The Monetary Board of the Central Bank of Sri Lanka decided to cancel the Finance Business Licence issued to Swarnamahal Financial Services PLC (SFSP), in terms of Section 37(3) of the Finance Business Act, No. 42 of 2011 (FBA) with effect from 28th December 2022. Accordingly, SFSP is not permitted to engage in Finance Business under the FBA with effect from 28th December 2022. Further, the Director of the Department of Supervision of Non- Bank Financial Institutions of the Central Bank of Sri Lanka has decided to cancel the Certificate of Registration of SFSP as a Registered Finance Leasing Establishment under the provisions of the Finance Leasing Act, No. 56 of 2000.

In view of the contribution made by SMB Finance PLC (SMBF) (then SMB Leasing PLC) to repay the remaining deposits of SFSP, as per the directions of the “Masterplan for Consolidation of NonBank Financial Institutions Sector”, unclaimed deposit liability of SFSP will be transferred to SMBF along with the corresponding assets value and relevant depositor information.

Further, Sri Lanka Deposit Insurance and Liquidity Support Scheme (SLDILSS) will take necessary actions to pay compensation to the outstanding insured depositors of SFSP up to a maximum of Rs. 1,100,000/- per depositor as per the regulations of the SLDILSS in due course. Upon the transfer of unclaimed deposit to SMBF and payment of compensation through SLDILSS, the entirety of the deposit liability of SFSP will be settled.

August 1, 2022

Mr. Anthony Nihal Fonseka has been reappointed as a member of the Monetary Board of the Central Bank of Sri Lanka (CBSL) with effect from 27 July 2022 for a period of six years. Previously, he served on the Monetary Board from July, 2016 to May 2020 and from May 2022 to July 2022.

He obtained his BSc Degree from the University of Ceylon, Colombo and is a Fellow of the Chartered Institute of Bankers, UK and a Honorary Fellow of the Chartered Institute of Securities and Investments, UK. He is a Senior Independent Director and Chairman of the Group Audit Committee of John Keells Holdings PLC, Chairman of Phoenix Industries Ltd., Non-Executive Director and Chairman of the Audit Committee of Brandix Lanka Ltd., Non-Executive Director and Chairman of Investment Committee of Phoenix Ventures Ltd..

A Banker by profession, Mr. Fonseka has held several key positions in the local and international banking and financial sector. He was the Chief Executive Officer of the DFCC Bank for over 13 years and prior to that was the Deputy Chief Executive Officer of HSBC Sri Lanka for 10 years. He has also served as the Chairman of the Colombo Stock Exchange and the Association of Development Financing Institutions in Asia and Pacific, Manila and as a director of Commercial Bank of Ceylon PLC, and DFCC Vardhana Bank PLC. He was the President of the Sri Lanka National Advisory Council of the Chartered Institute of Securities & Investments, UK for over 10 years and is a Member of the US-Sri Lanka Fulbright Commission.

Mr Fonseka has held many positions in the public sector as well. He was a member of the 2009 Presidential Commission on Taxation and a member of the National Procurement Commission established under the Constitution. He has served as a Director of the Credit Information Bureau and the Employees’ Trust Fund and has been the Co-Chairman of the national Council for Economic Development (NCED) – Capital Market Cluster.

Mr. Fonseka has authored many articles and made many presentations at seminars and conferences locally and internationally.

June 28, 2022

The Monetary Board of the Central Bank of Sri Lanka (Monetary Board) established the Advisory
Committee for Revival of Failed Finance Companies (Committee) in October 2021 to examine
possible revival options for five (5) failed finance companies, i.e., Central Investments & Finance
Ltd., ETI Finance Ltd., TKS Finance Ltd., The Finance Company PLC and The Standard Credit
Finance Ltd, of which licenses have been either cancelled or suspended. The Monetary Board has
vested the Committee with the responsibility of recommending possible revival options or
recommending liquidation for aforementioned five failed finance companies if such revival options
do not seem feasible.

The Committee submitted its final report to the Monetary Board on 31.05.2022, after careful
consideration of several proposals submitted by different parties for revival of four (4) of the abovementioned companies.

The Monetary Board, having considered the Report of the Committee on the said five failed finance
companies, noted that the proposals received for perusal of the said Committee were not viable and
entailed a number of policy and legal implications, which did not appear to be workable within the
existing regulatory framework. Further, given the present economic conditions, the said Committee
does not expect any viable proposals to be received from prospective investors. Under these
circumstances, the only option concerning the five (05) failed finance companies would be to continue
with liquidation proceedings/filing for liquidation. In the light of the above, the Committee in its report
has recommended to wind up the Committee. Based on the recommendation of the Committee the
Monetary Board decided to dissolve the Committee.

Consequently, actions will be taken to liquidate the aforementioned five failed finance companies in
accordance with applicable legal provisions.

May 30, 2022

Mr. Anthony Nihal Fonseka was reappointed as a member of the
Monetary Board of the Central Bank of Sri Lanka (CBSL) with effect
from 26 May 2022. Previously, he served on the Monetary Board
from July, 2016 to May 2020.

He obtained his BSc Degree from the University of Ceylon,
Colombo and is a Fellow of the Chartered Institute of Bankers, UK
and a Honorary Fellow of the Chartered Institute of Securities and
Investments, UK. He is a Senior Independent Director and
Chairman of the Group Audit Committee of John Keells Holdings
PLC, Chairman of Phoenix Industries Ltd., Non-Executive Director
and Chairman of the Audit Committee of Brandix Lanka Ltd. and a
Non-Executive Director and Chairman of Investment Committee
of Phoenix Ventures Ltd.

A Banker by profession, Mr. Fonseka has held several key positions in the local and international
banking and financial sectors. He was the Chief Executive Officer of the DFCC Bank for over 13 years
and prior to that was the Deputy Chief Executive Officer of HSBC Sri Lanka for 10 years. He has also
served as the Chairman of the Colombo Stock Exchange and the Association of Development
Financing Institutions in Asia and Pacific, Manila and as a Director of Commercial Bank of Ceylon PLC,
and DFCC Vardhana Bank PLC. He was the President of the Sri Lanka National Advisory Council of the
Chartered Institute of Securities & Investments, UK for over 10 years and is a Member of the US-Sri
Lanka Fulbright Commission.

Mr Fonseka has held many positions in the public sector as well. He was a member of the 2009
Presidential Commission on Taxation and a member of the National Procurement Commission
established under the Constitution. He has served as a Director of the Credit Information Bureau and
the Employees’ Trust Fund and has been the Co-Chairman of the national Council for Economic
Development (NCED) – Capital Market Cluster.

Mr. Fonseka has authored many articles and made many presentations at seminars and conferences
locally and internationally.

April 11, 2022

As the newly incumbent Governor of the Central Bank of Sri Lanka (CBSL), I am delighted that Mr. Sanjeeva Jayawardena, President’s Counsel and Dr. (Mrs.) Ranee Jayamaha, appointed members of the Monetary Board, have acceded to continue to serve on the Monetary Board, as they have always acted very independently, impartially, professionally and diligently, and have very positively contributed to all endeavors of the CBSL, while serving as members of the Monetary Board in the past. As I have the fullest faith and confidence in their complete professionalism, I look forward to receiving their continuing contribution and valuable guidance to the Nation, the Monetary Board and to me, as the Governor.

March 28, 2022

March 28, 2022: The Monetary Board of the Central Bank of Sri Lanka has approved the amalgamation of HNB Finance PLC and Prime Finance PLC with the amalgamated company being HNB Finance PLC, on December 8, 2021, under the Finance Companies (Structural Changes) Direction No. 1 of 2013, while considering the submission of the detailed amalgamation proposal submitted by both companies.

The union of these two key players in the country’s non-bank financial institute (NBFI) arena will give rise to a powerful synergy providing impetus to a diverse product and service offering.

Through this successful merger, HNB FINANCE will strengthen the relationship with the Prime Group, as the company is now equipped with innate knowledge and experience to further facilitate its venture into real estate financing.

While the controlling stake of 87.27 percent was acquired through the initial merger by crossing, the company moved to increase the stake by 9.37 percent by mandatory offer, as well as by another 0.51 percent by share market, giving HNB FINANCE a total stake of 97.15 percent. The remaining 2.85 percent is among outside minority shareholders.

HNB FINANCE’s existing and future customers can expect to benefit from an enhanced portfolio, efficient and easily accessible services through a combined branch network, a strengthened balance sheet and better distribution of risk with the addition of Prime Finance’s 93 percent asset-backed loan portfolio.

The anticipated combination of dynamism between the teams into one unit will also undoubtedly assist in accelerating the company’s plans for national expansion. Prime Finance’s expertise and indelible reputation within the sector combined with HNB FINANCE’s strengths, positions the company well to further its vision of adding value to the lives of all Sri Lankans.

January 20, 2022

In consideration of the current and expected macroeconomic developments, the Monetary Board of the Central Bank of Sri Lanka, at its meeting held on 19 January 2022, decided to adopt several policy measures with the view to strengthening macroeconomic stability. Accordingly, the Monetary Board decided to:

a) increase the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank by 50 basis points each, to 5.50 per cent and 6.50 per cent, respectively;
b) distribute the financing of essential import bills for fuel purchases among the licensed banks in proportion to their foreign exchange inflows;
c) mandate all registered tourist establishments to accept foreign exchange only in respect of services rendered to persons resident outside Sri Lanka;
d) extend the payment of an additional Rs. 8.00 per US dollar for workers’ remittances paid in addition to the incentive of Rs. 2.00 per US dollar offered under the “Incentive Scheme on Inward Workers’ Remittances” until 30 April 2022, reimburse the transaction cost borne by Sri Lankan migrant workers through the payment of Rs. 1,000 per transaction, when remitting money to rupee accounts via licensed banks and other formal channels with effect from 01 February 2022 and introduce higher interest rates for both foreign currency and rupee denominated deposits of migrant workers.

FULL TEXT

https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/press/pr/press_20220120_Monetary_Policy_Review_No_1_2022_e_S5kyr.pdf

Source : Government News Portal

Swarnamahal Financial Services PLC – Cancellation of the Licence

Reappointment of Mr. Anthony Nihal Fonseka as a member of the Monetary Board of the Central Bank of Sri Lanka for a period of six years

Recommendations made by the Advisory Committee for Revival of Failed Licensed Finance Companies

Appointment of Mr. Nihal Fonseka as a member of the Monetary Board of the Central Bank of Sri Lanka

Message by the Governor of the Central Bank of Sri Lanka

CBSL approves HNB Finance PLC and Prime Finance amalgamation

Monetary and other policy measures are expected to strengthen the macroeconomic stability