Amendments to Financial Companies Act

Hiran H. SENEWIRATNE

COLOMBO: The Government is planning to bring amendments to the Financial Companies Act of 1988 to give more teeth and address identified loopholes to avert future financial scams, Central Bank Governor Ajith Nivard Cabraal said.

“Due to Central Bank’s Non Banking Supervision Department’s active participation, a major issue in the financial sector was averted,” Cabraal told a media conference yesterday.

A number of banks and financial companies have been raising deposits by offering high interest rates and attracting the number of depositors without considering their stability. Some banks paid the interest while some like Pramuka and Sakvithi closed down disappointing many depositors, he said.

Cabraal said the Sakvithi Construction issue cropped up because the Central Bank took an active role to investigate six un-registered banks and financial institutions on their due diligence on September 19. They were given a month’s notice to rectify them.

Cabraal said they spent more than Rs 4.4 million to enlighten the public through media about banks and financial companies.

Deputy Minister of Finance Ranjith Siyambalapitiya said the Sri Lanka Banking Act has a lot of loopholes.