The ambitious resurrection program launched by the Central Bank of Sri Lanka (CBSL) following the aftermath of the financial crisis that nearly brought down The Finance Company, has created euphoria in the market once again.
CBSL that didn’t have to infuse treasury funds to put the affected institution back on its feet, came up with a successful restructuring strategy that has already shown remarkable progress.
This was revealed at the recent evening presentation conducted by the Centre for Banking Studies (CBS) of the Central Bank of Sri Lanka themed “Taming the beast in the forest: Experiences from the finance companies” referring to the state of affairs of the affected institutions that existed then. It was also mentioned at the seminar that The Finance Company was the first to “come out of the woods” which was a good sign for the financial sector of the country. Earlier this year The Finance Company successfully concluded a public share issue which was mostly subscribed by the largest banks in Sri Lanka. As such, The Finance Company became a pivotal case study on how crisis-hit financial institutions can be revived for the betterment of the country’s economy, its stakeholders and the financial services market.
It was also pointed out that The Finance Company, which is a 70 year old financial company is now in business as a result of crisis resolution mechanisms, regulatory measures and prudent financial governance adopted by the CBSL.Financial services sector, although has high resolute in guiding and guarding a country’s economy, can be equally sensitive and fragile in the phase of abuse and indifference.
The financial sector of Sri Lanka saw the collapse of many strong financial institutions during the past. The most note-worthy achievement of The Finance Company is the resilience it showed due to the prudent policies adopted by the CBSL during the crisis the financial sector experienced within the last two years and also at a time some international financing giants stumbled as a result of the global recession.
It was revealed during the CBSL presentation that The Finance Company, with the intervention of the CBSL in the form of prudential regulation, restructuring of balance sheets, disposal of real-estate, converting portions of deposits in to equity so that loyal customers benefited by way of capital gains. It was also declared that reviving The Finance Company was a focal point in building confidence among investors, depositors and other stakeholders in the supervisory and regulatory system of the Central Bank of Sri Lanka and proved that the country has the capacity and resources to salvage institutions from acute financial crises.
source - www.dailynews.lk
No comments:
Post a Comment