Four new finance companies

RFCs must get listed before June 2011:

Charumini de Silva

Four local companies have applied for licences to establish finance companies (RFC) from the Central Bank during this year. The Central Bank is in the process of evaluating these applications a senior Central Bank official told Daily News Business.

He said this demonstrates that the financial sector is strongly rebounding from the downturn and the confidence levels of the people have regained.

“The firm decisions taken by the Central Bank to safeguard the financial sector and appointing managing agents caused a speedy recovery in the sector,” the official said.

The Central Bank has made it mandatory for all RFCs to get listed in the Colombo Stock Exchange (CSE) by the end of June next year.

Although the RFCs have agreed to get listed in the stock market, out of the 36 RFCs only nine companies have entered into the capital market at present and soon there will be another two RFCs entering the stock market this year.

These two companies have already submitted their applications to the CSE. However, the Central Bank is monitoring the RFCs entering the stock market very closely.

The companies that underwent a liquidity crisis has shown an impressive growth, where the majority of the companies have already recovered completely. Those companies that are improving could get listed in the Dirisavi Board of the CSE. The Central Bank is confident and expects that the RFCs will return to their normal business. Branch expansion of RFCs during the post war scenario in the Northern and the Eastern provinces were commendable.

There were 39 new RFC branches opened in these provinces, as many economic activities took place.

“The Central Bank also gave priority to provide access to finance, whilst encouraging the companies to expand their branch network into these areas,” the official said.