Move to stabilise company :

Lankaputhra Development Bank - managing agent of The Finance

Anjana SAMARASINGHE

The Government and the Central Bank of Sri Lanka has appointed Lankaputhra Development Bank as the managing agent of The Finance company PLC to stabilize it and take it to a new era of professional management.

Chairman, Lankaputhra Development Bank Sarath De Silva said that as the managing agent of The Finance Company the bank will monitor and control their operations.

Lankaputhra Development Bank will take over the entire financial operations control as well as the management of the company to sustain growth as well as create confidence in the public. The objective of this new initiative is to be a source of strength to The Finance, helping it to resurge to its original status of being one of Sri Lanka’s oldest and trusted non-banking financial institutions.

“We will give priority to service the interest of the depositors and will come up with a structured repayment program which will focus on the maturity of deposits.

Restructuring of the company should combine with the confidence of the depositors and it should bring back the confidence,” he said. “We have not dissolved The Finance company board but we have taken the power of the board. We need key executives of the board to run the day-to-day operations. Employees of The Finance Company have pledged their fullest support for the new initiative”, he said.

“We have arrested the liquidity problem in the Finance company and the bank had suspended certain operations of the company which will impact on the cash flow. As the managing agent, the bank will inspect whether the company had violated any regulations imposed by the regulator and report to the regulator, he said. After the bank’s involvement in the company’s operations we are happy to say that there has been an increase in the deposit renewal rate. It is important to separate The Finance company from the Ceylinco group to increase confidence of depositors, he said.

Chief Risk/ Operations Officer Lankaputhra Development Bank Ravi Dassanayake said that The Finance Company funds collected from the public for short term deposits in billions had been utilized for long term loans and the duration mismatch has impacted on the cash flow of the company.

“We have set up a team comprising bank officials and officials from The Finance. There is a central commanding centre at the Lankaputhra Development bank to monitor and guide operations of the company. There will be a transparent communication system to keep all stakeholders updated, he said.

Key Executive, The Finance Company Kamal Yatawara said that they are confident that the company will be back on track within three months.

Earlier, we had a 80 percent deposit renewal rate and it dropped 30 percent to 40 percent during the crisis and it is now increasing with the appointment of the management agent to the company.