The Finance Company (TFC), Sri Lanka”s oldest finance company which celebrates its 70th anniversary, is now recovering from liquidity stresses under the management of Merchant Bank of Sri Lanka (MBSL). It earlier suffered from a loss of public confidence in the Ceylinco Group as a result of the subsequent collapse of the Golden Key Credit Card Company Ltd (GK) in 2009, a senior company oficial said.
TFC CEO Kamal Yatawara said that the company has been able to swell its deposit base by Rs.100 million monthly under the directions of MBSL due to prudent financial management and with the commitment of the staff.
He noted that the TFC is being monitored by the Central Bank with respect to liquidity, capital adequacy, and asset quality, among other parameters. As the non-banking financial institution with the largest fixed deposit base of more than Rs.26.8 billion and the largest customer base, spanning three generations the Finance Company aims to be a self driven company, he said.
Expressing their confidence in the TFC, two depositors D.H.Perera and Bernard Soza, who made deposits amounting to Rs. 100,00 each told the Business Times, the assurance given by the company to pay an interest of 13% and to refund their one year fixed deposits on maturity had prompted them to invest their money .
Sepala Ratnayake, Director Department of Supervision Non-Bank Financial Institutions at the Central Bank (CB) said the CB is in the process of introducing a new Act to set up a separate regulatory framework for micro finance companies and is also in the process of strengthening the Finance Companies Act. He revealed that a special surveillance system has been introduced by the CB preventing the sudden collapse of finance companies regulated by the CB. A new guarantee scheme is now being implemented in respect of loan facilities provided by banking institutions to Registered Finance Companies and Specialized Leasing Companies, in instances where these companies face unforeseen liquidity constraints, he added.
Deputy Finance Minister Dr Sarath Amunugama who was the chief guest at the 70th anniversary celebrations pointed out that the TFC which faced a financial crisis two years ago is now recovering rapidly and it will reach breakeven point by September this year. The customer confidance has been restored, with the timely intervention of the government with rescue packages and regulatory measures.
He appealed to finance companies to extend credit facilities for Small and Medium scale Industrial sector to boost the economy.
MBSL chairman M.R. Shah stressed the need to follow the practices of good governance as the finance companies are dealing with people’s money. He said that the TFC is now making headway towards recovery and stability under a new strategic direction set by the MBSL. |
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