Sunday July 03, 2011
Seven Finance Cos. fail deadline, get extension to list on CSE
Seven Registered Finance Companies (RFCs) have been given an extension to list on the Colombo Stock Exchange ( CSE) after they failed to meet the June 30 for compulsory listings, Central Bank sources said. Eighteen of 36 RFCs have so far listed themselves on the CSE following a directive issued by the Central Bank. Applications for listing submitted by 11 RFCs are being reviewed by the Central Bank, a senior official of the bank said.
In terms of the Monetary Law Act and the Finance Companies Act, RFCs who failed to meet the deadline for listing were liable to face strict action for non compliance. But the Central Bank will not take any action against these companies as they are continue to face financial constraints. Several of the smaller finance companies are closely held family-firms and they are little bit reluctant to go public, he added.
The bank should implement the regulation treating all RFCs alike and it has to be fair for companies who have already been listed in the CSE, he said adding however that they are willing to be flexible when considering the reasons for the delay of some finance companies in complying with rules.
The Central Bank has made it compulsory for registered financial companies to be listed in the market for transparency.
Almost all RFC’s are performing well, with the growing public confidence in the sector, Shirly Perera, a former chief of Sri Lanka's Finance Houses Association and Deputy Chairman Central Investments and Finance Ltd, said. Mr.Perera noted that RFCs have taken steps to reduce the incidence of bad loans and rein in bad debts; together with the improving macroeconomic conditions, these steps are expected to aid asset quality improvement.
Why still delay. This is September 2013. No action from CB..