The total deposit base of registered finance companies (RFCs) has exceeded Rs 120 billion, while the total asset base has recorded over Rs 115 billion up to date. The Central Bank predicts RFC asset base will grow around 10 percent and deposits by over 10 percent. The Bank is also predicting a 12 percent growth in lending.
With the investment potential in the Northern and the Eastern Province it is an achievable target, Central Bank Additional Director, Department of Supervision Non-Bank Financial Institutions H. M. Ekanayake told Daily News Business.
The Central Bank has given approval to one new finance company and another two finance companies have applied for licences.
The Central Bank has granted approval to RFCs to expand their branch network in the Northern and the Eastern province. It has granted approval for over ten new branches in North and East to different RFCs. The majority of the RFCs are performing commendably, while six companies are under managing agents.
During the past few months these finance companies have shown a remarkable progress. They expect their liquidity ratio to improve gradually, Ekanayake said.
The Central Bank expects that these six companies will also recover soon. The Central Bank is also providing loan facilities to these RFCs under the Central Bank s credit current scheme, he said.
We expect the RFCs to show a better growth and a stabilization compared to the corresponding year, Ekanayake said.
With the reduction in the interest rates the finance companies have lent for hire purchase, industrial loans and pledge facilities. Senior citizens are eligible to get additional one percent for their deposits from finance companies.
The introduction of an insurance scheme for depositors of RFCs is still in process. The Central Bank expects to complete it by the end of this year. The Central Bank will to offer Rs 100,000 as the maximum coverage for individuals under this insurance scheme, the Additional Director said.
At present, there are over 10,000 micro finance companies varying from different scales such as small, medium and large scale. The Central Bank is in the process of introducing a new Act to set up a separate regulatory for micro finance companies and also in the process of strengthening the Finance Company Act.
The proposals have been submitted to the Finance Ministry and are awaiting Cabinet approval, Ekanayake said.