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[size=13]The Central Bank (CB) is in talks with three foreign investors in a bid to restructure the failed CIFL (Central Investments and Finance Ltd), CB sources said.[/size]
“We’re in the process of restructuring CIFL under the Financial Sector Consolidation programme,” a CB source told the Business Times. He added that CIFL Depositors Association had withdrawn the court case against the CB and the CB in turn promised to try to find an investor to finance another Rs 1 billion to augment the financial structure of CIFL.
K. Wijaya Gunawardena, President, CIFL Depositors Association confirmed to the Business Times that the case against the CB was withdrawn on September 19.
The CB source said that if an investor infuses Rs 1 billion in cash, the CB has promised to grant a ‘matching’ loan at a concessionary rate from the Deposit Insurance and liquidity Support Scheme (SLDILSS). It’s a 10 year funding facility. “We want them to bring in Rs 1.5 billion.”
At the CB’s 64th Anniversary oration titled “Financial Sector Consolidation: Why and How?” recently C J P Siriwardene, Assistant Governor CB delivering the oration said that although in 2013 CIFL accounted for only 0.35 per cent of the assets of the financial sector, the publicity it created resulted in a huge uproar in the financial market and the economy.
“We introduced revival plans on a case by case basis so that public confidence will be restored and financial system stability will be sustained. Under this revival plan, the CB decided to provide supplementary long-term funding facility through SLDILSS for any new investor or financial institution, which acquires or merges with any cash-strapped non-bank financial institution (NBFI), so that operations of such NBFI could be revived and restructured without weakening the financial position of the acquirer,” he said
“We’re in the process of restructuring CIFL under the Financial Sector Consolidation programme,” a CB source told the Business Times. He added that CIFL Depositors Association had withdrawn the court case against the CB and the CB in turn promised to try to find an investor to finance another Rs 1 billion to augment the financial structure of CIFL.
K. Wijaya Gunawardena, President, CIFL Depositors Association confirmed to the Business Times that the case against the CB was withdrawn on September 19.
The CB source said that if an investor infuses Rs 1 billion in cash, the CB has promised to grant a ‘matching’ loan at a concessionary rate from the Deposit Insurance and liquidity Support Scheme (SLDILSS). It’s a 10 year funding facility. “We want them to bring in Rs 1.5 billion.”
At the CB’s 64th Anniversary oration titled “Financial Sector Consolidation: Why and How?” recently C J P Siriwardene, Assistant Governor CB delivering the oration said that although in 2013 CIFL accounted for only 0.35 per cent of the assets of the financial sector, the publicity it created resulted in a huge uproar in the financial market and the economy.
“We introduced revival plans on a case by case basis so that public confidence will be restored and financial system stability will be sustained. Under this revival plan, the CB decided to provide supplementary long-term funding facility through SLDILSS for any new investor or financial institution, which acquires or merges with any cash-strapped non-bank financial institution (NBFI), so that operations of such NBFI could be revived and restructured without weakening the financial position of the acquirer,” he said
