July, 8, 2020
In view of the recent developments in the finance leasing business, the Governor of the Central Bank of Sri Lanka appointed a three member committee to examine and report on the irregularities and illegal activities of the finance and finance leasing businesses, and to make recommendations to curtail such activities.
In response to the request made by the Committee, more than 200 views, proposals or complaints were received from the general public, civil organizations, financial sector associations and other interested parties in the finance business and finance leasing business. The Committee, having examined such representations, has completed the report, and the report was handed over to the Governor of the Central Bank of Sri Lanka on 07.07.2020.
The Committee has placed particular emphasis on the illegal and irregular activities in the finance leasing business and has identified two set of activities in the business of finance leasing that require attention, namely, activities of the registered finance business and the activities of the illegal operators.
Further, the Committee has identified that the activities emanating from the aforesaid categories mainly revolve around the problems related to the recovery of possession of equipment, abuse of the terms and conditions in the finance lease agreements entered intobetween the lessor and the lessee, certain loopholes in the provisions of the Finance Leasing Act, No. 56 of 2000.
Accordingly, the Committee recommends short term and long term proposals of which the short-term proposals are expected to address the current problems by providing more efficient solutions to the problems identified and the long-term proposals mainly focus on amendments to the Finance Leasing Act.
Photo - Mr. K G P Sirikumara, Director, Legal and Compliance Department, Central Bank of Sri Lanka handing over the report to Prof. W D Lakshman, Governor of the Central Bank of Sri Lanka