The Central Bank of Sri Lanka has decided to cancel the license issued to Bimputh Finance PLC (BFP) under the Finance Business Act.
The license cancellation is effective from September 01, 2023. Accordingly, Bimputh Finance is not allowed to engage in finance business hereafter.
CBSL’s Monetary Board has observed that Bimputh Finance has been continuously violating/contravening the provisions of the Finance Business Act, several generation directions and rules that have been issued with the view to achieve the overall objective of financial system stability and also specific directions issued to the company to address its critical financial position.
Consequently, the financial condition of Bimputh Finance had been deteriorating due to deficient capital level, poor asset quality and continuous losses, the CBSL said in a statement.
Despite several time extensions granted to Bimputh Finance by the Monetary Board to comply with the provisions of the Finance Business Act, Directions and Rules issued thereunder and adhere to the Masterplan for Consolidation of Non-Bank Financial Institutions, no satisfactory progress has been made by the company to revive the critical condition it was facing.
Taking into consideration of the above, the Monetary Board decided to cancel the license issued to Bimputh Finance, under the Finance Business Act to carry on finance business, with effect from today, the statement read further.
Largely complying with the Monetary Board directions issued, Bimputh Finance has managed to repay a major portion of its deposit liabilities during 2022, the CBSL added. Sri Lanka Deposit Insurance and Liquidity Support Scheme (SLDILSS) will initiate necessary actions to pay compensation to the unclaimed depositors of the company, up to a maximum of Rs. 1,100,000 per depositor as per the regulations of the SLDILSS.
“Accordingly, all eligible depositors of Bimputh Finance will be able to recover their deposits in full through SLDILSS upon submitting due claims within two years from the date of cancellation of license or before the appointment of the liquidator by competent court, whichever occurs earlier as per the regulation of SLDILSS.”