CB empowers MBSL to manage The Finance

Identifies key executives:

by Lalin FERNANDOPULLE

The Central Bank (CB) said yesterday that the Merchant Bank of Sri Lanka PLC (MBSL) was permitted to enter into a management agreement with the Finance and Guarantee Company Ltd. to manage and monitor the activities of the company.

CB has identified the key executives who would be entrusted with the overall management responsibilities of the company and the appointment will be made within the next few days.

The expert group would advise the management teams while assisting in the facilitation of the necessary financial support from the implementing bank.

Central Bank sources said that negotiations are presently under way in relation to the engagement of a suitable managing agent for Ceylinco Investment and Reality Ltd., and the Asian Finance Ltd. The Bank is monitoring the progress.

A top official of the Central Bank said that several measures were taken to stabilise registered finance companies of the Ceylinco Group following the collapse of the Golden Key Credit Card Company late last year.

The Central Bank is currently implementing the stimulus package for the finance and leasing industry which was approved by the Cabinet on February 25.

Banking experts said the CB intervention is a timely move to stabilise finance companies of the Ceylinco Group and added that it would help restore nomalcy of business of the institutions.

Director, Bank Supervision Department Central Bank, B.D.W. Silva said the Central BanK has taken measures to ensure financial stability of all licensed registered institutions in the wake of the recent financial scams that triggered uncertainty causing major problems to corporates.

He said the banks have been reluctant to lend and as a result credit growth declined to around 8 per cent from 17 per cent last year aggravating the crisis. The Central Bank has called upon banks to expand lending capacities.

Meanwhile Transparency International Sri Lanka (TISL) has recommended to President Mahinda Rajapaksa to appoint a Banking and Finance Commission, in the light of the issues raised at a round table discussion held recently at the BMICH.

Director TISL, Chandra Jayaratne said TISL collated the key issues identified by the multistakeholder group at the discussion on the `Way forward for corporate stability by sustainable economic strategies'.