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Sri Lanka‘s Banks continue its leasing business without restrictions

Sri Lanka‘s Banks continue its leasing business without restrictions

Sri Lanka‘s Banks continue its leasing business without restricting it to over Rs. 5 million as the Finance Ministry is yet to issue the relevant gazette notification and the circular containing operational guide lines on the revision of the 2016 budget proposal.

Finance companies can handle leasing anything below Rs. 5 million and this sector would also not be affected.

A top level discussion between the Central Bank Governor Dr. Indrajit Coomaraswamy and senior bank officials ended in a dead following representations made by them heavily lobbying for the retaining of leasing business under their belt, A Bank General Manger who participated in the meeting recently said.

According to the budget proposal the ban on commercial banks from engaging in leasing was scheduled to be implemented from June 1, but a decision has been taken to restrict the commercial banks exposure to leasing without banning it altogether.

Handing over leasing totally to finance companies is a risk for consumers as some of them have weaker asset quality and also face liquidity problems, the official said adding that they will have to curtail the number of employees engaged in the leasing division or to get rid of them if the bank is confined to its core business or restricted it.

Last modified on Friday, 26 August 2016 08:28