The expert panel appointed by the Central Bank (CB) to advise finance companies that chose to avail themselves to the government bailout package was primarily a confidence building exercise undertaken to stave off the collapse of the industry, according to industry sources. Now, the sources say, the role of the panel is less ‘hands on’ and the running of the finance companies has more or less stabilized.
Finance companies needed expertise to be given impartially and the panel is still advising them off and on. The panel comprises President of the Institute of Chartered Accountants of Sri Lanka Nishan Fernando, Attorney at Law Arittha Wickramanayake, Add. General Manager of the National Savings Bank H.M. Hennayake Bandara and Deputy Chairman of the Browns Group of Companies Ajith Devasurendra.
The sources added that the problem at the time when Golden Key Credit Card Company collapsed was a serious run on all finance companies which could have led to the collapse of the industry. The decision by the CB to appoint the expert panel was a good decision and created confidence in the market. They said that the move by the CB helped because not a single finance company crashed during that period.
An industry insider told The Sunday Times FT that the situation with the rest of the finance companies remains the same. While some companies have stabilized and the situation with the larger companies is generally okay, the smaller companies are finding it difficult to get deposits.