While reducing high penal interest rates: Comprehensive Master Plan for Revamping NBFI Sector
By Ishara Gamage
The Central Bank of Sri Lanka (CBSL) is currently reviewing the regulatory landscape and business models of the distressed Non-Bank Financial Institutions (NBFI) sector, to launch a sector consolidation mission from next year, top CBSL officials, Assistant Governor in charge of the NBFI J.P.R. Karunaratne and Director of the Department of Supervision of Non-Bank Financial Institutions J.D.S.J. Nanayakkara, told Ceylon FT.
“We believes NBFIs should look at their synergies and advantages including enhancing opportunities to strengthen diversified business models resulting in such NBFIs facing market challenges and threats effectively,” they said in an exclusive interview with Ceylon FT The CBSL is in the process of developing a master plan for the NBFI sector in order to develop strong LFCs, with enhanced resilience to shocks, in order to cater to the growing demands of the economy.
“Public disclosures will be made once the necessary approvals are obtained from the Monetary Board,” they said.
CBSL is also in the process of introducing limits on ownership to Licensed Financial Companies (LFCs) as it is significantly important as a part of the process of strengthening good corporate governance practices in this sector. It was decided to diversify shareholding of LFCs on a staggered basis in the long-term. “We have issued a consultation paper in this regard,” they said.
The Department has also commenced discussions with LFCs to explore the possibility of reducing high penal interest rates.
“CBSL is currently reviewing the regulatory landscape and business models of the NBFI sector, which will be made available to the public once the we obtain the necessary approvals,” they concluded.