The Central Bank of Sri Lanka (CBSL) says necessary action will be taken to liquidate the five failed finance companies in accordance with applicable legal provisions.

The Monetary Board of CBSL 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, namely 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 vested the Advisory Committee with the responsibility of recommending possible revival options, or liquidation for the aforementioned failed financial companies if such revival options do not seem feasible.

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

The Monetary Board, having considered the report of the Advisory 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, the CBSL said in a statement issued on the matter.

Further, given the present economic conditions, the said committee does not expect any viable proposals to be received from prospective investors, it read further.

“Under these circumstances, the only option concerning the 05 finance companies would be to continue with liquidation proceedings/filing for liquidation.”

Meanwhile, the Monetary Board has decided to dissolve the Advisory Committee, based on its recommendations.

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