Janaka Ratnayake

‘Restores lost confidence’ :

MBSL helps failed finance companies

Harshini Perera

Though people lost confidence in making long term deposits in finance companies, their confidence was regained when the authorities intervened in the sector to prevent abuse.

A classic example of this is The Finance Company which is the largest and oldest finance company in Sri Lanka, Chairman, Merchant Bank of Sri Lanka (MBSL) PLC, Janaka Ratnayake said.

He said that the financial crisis, which Sri Lankan finance companies underwent, became his challenge and it directed him towards finding ways to normalize the sector.

Q: How has MBSL been successful in managing a body of failed financial companies?

A: There is mismanagement in borrowed money of some finance companies. It is because that money was borrowed from clients for a short term but lent to creditors on investments on a long term.

A crisis situation arose when finance companies faced a liquidity problem. Along with the world’s global downturn in the midst of the internal financial crisis, many financial companies which were brought under our management, have regained their investments portfolio and reputation.

Hence, these companies have to be restructured to reduce the vulnerability. The Merchant Bank of Sri Lanka PLC (MBSL) gave them the support to rebuild and restructure the companies.

Q: What are the services provided by MBSL to such failed finance companies?

A: Restructuring a large company is an endless task. Whenever the public feels that their deposits are uncertain in a finance company, they tend to withdraw the money immediately. However, the finance companies had already deposited the money on long-term investments and therefore, they find it difficult to pay back the money promptly. On such occasions, MBSL achieved a remarkable improvement in finance companies.

“We assisted the operations to recommence normal business units and transactions. Accepting and mobilizing its deposits is one of the main tasks accomplished by MBSL.

In addition MBSL assists in granting loans without interruption and engaging in real estate activities. I am happy that The Finance Company has received deposits to the value of Rs. 250 million for the three months under the management of MBSL. Therefore, we have regained the confidence of our clients.

Q: What are the new bodies governed by MBSL PLC?

A: The Central Bank of Sri Lanka handed over three new assignments to us. They are the management of Asian Finance Company, Ceylinco Investments and Realty, a registered company under the Finance Act and The Finance and Guarantee Company.

The restructuring process of each of these companies differ because of the quantity of assets and the nature of employment.

We introduced good management practices, good governance, methods to cut down excess expenditure and restart their business activities.

Q: People lost confidence in leasing companies recently. The Ceylinco Group especially has faced such a problem. How have you helped finance companies to get over it?

A: The Ceylinco Group operated six registered companies. Four companies among them are now under our management.

There were twelve companies, which were not registered under the Ceylinco Group but by different people and they were the bogus finance companies.

The public had such an image for a period of time in the past but they are now changing gradually.

Since MBSL is a subsidiary of the Bank of Ceylon as a government entity, it was easy for us to manage the companies. Along with the management, we could regain the confidence of the people.

Q: What is your advice to young people?

A: My advice for them is to work hard and face challenges.

I feel that education is very crucial for young people. One should be an objective-driven person and have a clear goal and proceed on the path with effort. Ultimately one should make an impact on what he/she does.

Q: What is the best place you wish to visit in Sri Lanka?

A: I wish to go Down-South and relax on the beach with my family. I like to visit Sigiriya too.

Q: What are the places you wish to visit outside Sri Lanka?

A: Singapore is my favourite country outside Sri Lanka. It gives me a homely impression.

Q: How do you spend your leisure?

A: I hardly get any free time. Therefore, I have made my profession a way of spending my leisure. In other words, we indirectly help millions of aggrieved people with their deposits.

I get a large number of letters from Senior citizens and young parents who have got into difficulties. Hence, I have made it a point to perform well on behalf of them in the management of finance companies.

My life becomes exciting when I work in such an environment.