The Central Bank of Sri Lanka (CBSL) reportedly is working on a plan to merge multiple “ailing” non-banking financial institutions (NBFIs) in the country with “financially stable” firms, given that “nearly half of the sector face[s] severe liquidity issues.” Central Bank Governor W D Lakshman reportedly stated, “We have found the institutions that urgently need to come under the consolidation program to ensure stability in the financial sector of the country.” The restructuring plan, which will be presented “soon” to CBSL’s governing body, the Monetary Board, will involve reducing the number of finance and leasing NBFIs from 46 to approximately 20.
Established in 1950, CBSL seeks to ensure the stability of the nation’s financial sector as well as its economy as a whole. Its gross reserves totaled approximately USD 7.1 billion as of July 2020. Prof. W D Lakshman was appointed governor of the institution in 2019 and continues to serve in that capacity as of 2020.
By Kate Finster, Research Associate
Sources and Additional Resources
CBSL June 2020 press release
https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/press/pr/press_20200626_statement_made_by_cbsl_on_regulation_and_supervision_of_nbfis_e.pdf
Sunday Observer news article
http://www.sundayobserver.lk/2020/08/30/business/nbfis-mergers-cards
CBSL 2019 annual report
https://www.cbsl.gov.lk/en/publications/economic-and-financial-reports/annual-reports/annual-report-2019
CBSL August 2020 Monetary Policy Review
https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/press/pr/press_20200820_Monetary_Policy_Review_august_2020_e_Bf6jQ.pdf
CBSL Monetary Board
https://www.microcapital.org/microcapital-brief-central-bank-of-sri-lanka-hopes-third-time-is-charm-for-microfinance-institutions-law/
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