Liquidity Status

July 16, 2010 (LBO) - A credit guarantee scheme introduced by Sri Lanka's central bank has become operational with a finance company making use of the first liquidity facility this week, a statement said.
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"The Central Bank is actively encouraging the speedy utilization of the scheme by the RFCs and the respective banks," it said.


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"Through the resumption and revival of their normal business, the RFCs are expected to be able to meet their creditor obligations and such situation is expected to be in the best interest of all stakeholders, including depositors, lenders, staff and customers." The scheme was launched in January 2010 as one of the key measures to deal with liquidity constraints confronted by a few registered finance companies (RFCs).

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Under the scheme, RFCs and specialized leasing companies (SLCs) are entitled to obtain loan facilities from banks against their real estate and financial assets.

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These will enhance their liquidity position to conduct normal business operations, with a credit guarantee being provided by the central bank.

"As some RFCs and SLCs have a large number of real estate assets, the scheme will provide quick liquidity to such companies, thereby enabling them

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