Central Bank cancels CIFL license; legal action against responsible parties

Mar 05, 2018 (LBO) – Monetary Board of the Central Bank has decided to cancel the licence issued to CIFL under the Finance Business Act with effect from today. Director of the Department of Supervision of Non- Bank Financial Institutions of the Central Bank has also decided to cancel the Certificate of Registration as a Registered Finance Leasing Establishment under the Finance Leasing Act. Accordingly, CIFL is not permitted to engage in Finance Business under the FBA and to grant new finance lease facilities under FLA with effect from today. Central Investments and Finance (CIFL), a Licensed Finance Company in Sri Lanka has been facing severe financial problems over the last four years due to mismanagement and various fraudulent activities taken place in the company. Depositors of the company have failed to withdraw their money over the last four years. All efforts made to revive the company through different strategies have been failed. "The continuity of current status will further detrimental to the interest of depositors and other stake holders of the company," the Central Bank said. "Sri Lanka Deposit Insurance and Liquidity Support Scheme will take necessary actions to pay compensation to the insured depositors under the applicable laws and regulations." The Central Bank further said depositors may be able to recover some of their dues in the process of liquidation subject to the priority of claims. "All debtors of the company are required to pay their dues to the company through a Bank account announced by the company," "Central Bank wishes to emphasize that legal actions will be taken against the responsible parties for the mismanagement and fraudulent activities of the company."