Finance Support

Sri Lanka's state minister of defence Ruwan Wijewardene (L) takes part in a press conference in Colombo on April 24, 2019. - A Sri Lankan security dragnet hunting those responsible for horrifying bombings that claimed more than 350 lives has scooped up a further 18 suspects, police said April 24, as pressure mounted on politicians to explain why no one acted on intelligence warnings. (Photo by ISHARA S. KODIKARA / AFP) (Photo credit should read ISHARA S. KODIKARA/AFP/Getty Images)

Feb 20, 2009 (LBO) – Sri Lanka’s government is offering four billion rupees in bonds and guarantees to improve liquidity in registered finance and leasing companies facing liquidity problems, central bank governor Nivard Cabraal said. A liquidity ratio of 15 percent required to be maintained against fixed deposits would be cut to 10 percent and a 20 percent liquidity ratio against savings deposits would be cut to 15 percent.

Cabraal said the government will also specify limits on the remuneration and salaries of senior executives of finance and leasing companies which make use of the support package.

Those who make greater use of the facility will be subject to more stringent rules.

A three member committee would be appointed to liaise with the Treasury, the Central Bank and finance companies and monitor the facilities that are extended and also develop new ones if needed.

The regulator will also open its Medium and Long Term Credit Fund, a central bank liquidity facility that had been used in the 1980s to help collapsing financing if there is a need.

“At the moment there is no need for such a facility,” Cabraal said. “We believe the measures we have announced would be sufficient to deal with the liquidity