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Five failed finance companies to be liquidated

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The Central Bank of Sri Lanka’s Advisory Committee proposed that five companies be liquidated. The said committee was established in October 2021 by the Monetary Board of the Central Bank of Sri Lanka.

The five failed finance companies, Central Investments & Finance Ltd., ETI Finance Ltd., TKS Finance Ltd., The Finance Company PLC, and The Standard Credit Finance Ltd., whose licenses have been either revoked or suspended, were the focus of the Committee’s investigation into potential revival strategies.

The Monetary Board has entrusted the Committee with recommending potential solutions for the revival of the aforementioned five insolvent finance companies or recommending liquidation if such options do not appear realistic.

The Committee carefully considered many recommendations for the revival of four of the aforementioned enterprises before submitting its final report to the Monetary Board on May 31, 2022. 

After having read the Committee’s report on the aforementioned five failed finance companies, the Monetary Board noted that the proposals submitted for the said Committee’s review were not viable and involved a number of policy and legal implications that did not appear to be implementable within the current regulatory framework.

Furthermore, the stated Committee does not anticipate receiving any workable bids from potential investors given the current economic climate. The continuation of the liquidation procedures or filing for liquidation would be the sole course of action for the five bankrupt financial businesses in these circumstances.

Given the aforementioned, the Committee in its report advised dissolving the Committee.

The Monetary Board made the decision to dissolve the Committee based on its advice. As a result, steps will be made in accordance with the legal requirements to liquidate the aforementioned five failed financial organizations.

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