Compendium of Regulations Issued to Finance Companies

Sri Lanka

(enacted in 2006)

The Compendium of Regulations Issued to Finance Companies of 2006 was issued by the Department of Supervision of Non-Bank Financial Institutions of the Central Bank of Sri Lanka to regulate finance companies.

The regulations are organized as follows:

  • Part I Directions:
    • Provision for bad & doubtful debts;
    • Writing off of loans & advances;
    • Transfer of assets;
    • Business transactions with relatives;
    • Lending;
    • Accrued interest;
    • Audited accounts;
    • Single borrower limit;
    • Revenue recognition and – disclosures in the financial statements;
    • Deposits-incentive schemes;
    • Interest;
    • Closure of office/s for business;
    • Minimum core capital;
    • Risk weighted capital adequacy ratio;
  • Part II Rules:
    • Advertising;
    • Registration and licensing;
  • Part III Instructions/Guidelines:
    • Instructions issued under paragraph 3 of the Finance Companies Act (Risk Weighted Capital Adequacy Ratio);
    • Guidelines issued on inclusion of revaluation reserves in capital funds/tier 2; and
    • Supplementary capital.