"As one of the key measures to deal with liquidity constraints confronted by a few registered finance companies (RFCs), the Central Bank of Sri Lanka (CBSL) introduced a Credit Guarantee Scheme in January 2010. Under such a scheme, RFCs and specialized leasing companies (SLCs) are entitled to obtain loan facilities from banks against their real estate and financial assets, to enhance their liquidity position to conduct their normal business operations, with a credit guarantee being provided by the CBSL. As some RFCs and SLCs have a large number of real estate assets, the scheme would provide quick liquidity to such companies, thereby enabling them to discharge their obligations and improve their businesses faster," the Central Bank said in a statement yesterday.
"Currently, several RFCs are negotiating with banks to obtain credit facilities under the scheme. These negotiations are expected to be finalized within a short period of time, with the first ever such facility being availed of by Industrial Finance Ltd on Thursday 15th July 2010.
The Central Bank is actively encouraging the speedy utilization of the scheme by the RFCs and the respective banks, and is confident that, with the loan facilities to be disbursed under the scheme, the relevant RFCs would be able to resume and/or continue their normal business operations expeditiously. Through the resumption and revival of their normal business, the RFCs are expected to be able to meet their creditor obligations and such situation is expected to be in the best interest of all stakeholders, including depositors, lenders, staff and customers," it said.
source - www.island.lk
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