Directions, Rules, Determinations, Notices, and Guidelines

Directions, Rules, Determinations, Notices, and Guidelines

Applicable to

Licensed Finance Companies

and

Specialised Leasing Companies

Department of Supervision of Non-Bank Financial Institutions

CENTRAL BANK OF SRI LANKA

DIRECTIONS, RULES, DETERMINATIONS, NOTICES, AND GUIDELINES APPLICABLE TO

LICENSED FINANCE COMPANIES AND

SPECIALISED LEASING COMPANIES

Inclusive of amendments made up to 30th November 2013

Department of Supervision of Non-Bank Financial Institutions

November 2013

ISBN 978-955-575-279-4

Price : Rs. 400/-

Disclaimer Every effort has been made to ensure the accuracy of the text. The Central Bank of Sri Lanka does not hold itself responsible for any errors, omissions or inadvertent alterations in any manner.

Printed at Central Bank Printing Press, 58, Sri Jayawardenepura Mw., Rajagiriya, Sri Lanka. Published by Dept. of Supervision of Non-Bank Financial Institutions

Central Bank of Sri Lanka, 30, Janadhipathi Mawatha, Colombo 01, Sri Lanka.

CONTENTS

Part I

Licensed Finance Companies

Preface

1. Licensing of Finance Companies 1.1 Finance Companies (Application) Rule No. 01 of 2012 1.2 Finance Companies (Annual License Fee) Rule No. 02 of 2012

2. Capital

2.1 Finance Companies (Capital Funds) Direction No. 01 of 2003 2.2 Finance Companies (Risk Weighted Capital Adequacy Ratio) Direction No. 02 of 2006 2.3 Finance Companies (Minimum Core Capital) Direction No. 01 of 2011 3. Credit 3.1 Finance Companies (Provision for Bad and Doubtful Debts) Direction No. 03 of 2006 3.2 Finance Companies (Single Borrower Limit) Direction No. 04 of 2006 3.3 Finance Companies (Lending) Direction No. 01 of 2007 3.4 Finance Companies (Register of Written-off Loans) Direction No. 10 of 1991 3.5 Finance Companies (Accrued Interest) Direction No. 15 of 1991 3.6 Finance Companies (Writing off of Accommodations) Direction No. 02 of 2013 4. Investments 4.1 Finance Companies (Investments) Direction No. 07 of 2006 5. Liquidity 5.1 Finance Companies (Liquid Assets) Direction No. 04 of 2013 6. Operational 6.1 Finance Companies (Deposits) Direction No. 01 of 2005 6.2 Finance Companies (Business Transactions with Directors and their Relatives) Direction No. 02 of 2007 6.3 Finance Companies (Insurance of Deposit Liabilities) Direction No. 02 of 2010 6.4 Finance Companies (Information Systems Security Policy) Direction No. 04 of 2012 6.5 Finance Companies (Debt Instruments) Direction No. 03 of 2013 6.6 Finance Companies (Interest Rates) Direction No. 05 of 2013 7. Corporate Governance 7.1 Finance Companies (Corporate Governance) Direction No. 03 of 2008 7.2 Finance Companies (Corporate Governance ? Amendment) Direction No. 04 of 2008 7.3 Finance Companies (Assessment of Fitness and Propriety of Directors and

Officers Performing Executive Functions) Direction No. 03 of 2011 7.4 Finance Companies (Corporate Governance ? Amendment) Direction No. 06 of 2013 8. Reporting Requirements 8.1 Finance Companies (Audited Accounts) Direction No. 16 of 1991 8.2 Finance Companies (Reporting Requirements) Direction No. 02 of 2011

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Page vii

1 28

28 29 43

44 46 48 49 50 51

52

53

55 58 59 60 62 65

67 77

78 86

87 88

9. Other Directions

9.1 Finance Companies (Fixed Assets) Direction No. 11 of 1991

91

9.2 Finance Companies (Deposits-Incentive Schemes) Direction No. 05 of 2001

92

9.3 Finance Companies (Closure of Office/s for Business) Direction No. 04 of 2005

93

9.4 Finance Companies (Opening/Shifting/Closure of Branches/Offices) Direction No. 06 of 2005 93

9.5 Finance Companies (Stimulus Package Conditions) Direction No. 03 of 2009

94

9.6 Finance Companies (Structural Changes) Direction No. 01 of 2013

96

10. Rules, Circulars, Determinations and Notices, Guidelines and Instructions

Rules

10.1 Finance Companies (Advertisements) Rule No. 01 of 2006

98

Circulars

10.2 Finance Companies (Panel of External Auditors) Circular No. 01 of 2012

100

10.3 Circular relating to the Finance Companies (Insurance of Deposit Liabilities)

Direction No. 02 of 2010

101

10.4 Publication of Six Month Financial Data and Key Performance Indicators

102

Determinations and Notices

10.5 Determination on the Inclusion of Unsecured Debentures in

Capital Funds of Finance Companies

107

Guidelines

10.6 Finance Companies (Opening of Branches/ Offices) Guidelines No. 01 of 2006

108

10.7 Finance Companies (Publication of Half Yearly Financial Statements)

Guidelines No. 02 of 2006

111

10.8 Finance Companies (Maintenance of Savings Accounts for Minors)

Guidelines No. 01 of 2007

113

10.9 Panel of External Auditors of Non-Bank Financial Institutions

Licensed by the Central Bank of Sri Lanka

114

Instructions

10.10 Collection of Information for the Facts Book

118

11. Circulars issued by other Departments of the Central Bank of Sri Lanka (which relevant to the LFCs)

Bank Supervision Department

i. Sri Lanka Deposit Insurance Scheme Regulations No. 01 of 2010

120

ii. Sri Lanka Deposit Insurance Scheme Circular No. 01 of 2010

124

iii. Sri Lanka Deposit Insurance Scheme Circular No. 02 of 2010

126

iv. Sri Lanka Deposit Insurance Scheme Regulations No. 01 of 2011

128

v. Sri Lanka Deposit Insurance Scheme Circular No. 01 of 2011

129

vi. Sri Lanka Deposit Insurance Scheme Regulations No. 02 of 2011

130

Financial Intelligence Unit

i. Compliance with the Reporting Requirements under the Financial Transaction Reporting Act,

No. 06 of 2006 - Circular No. 04 of 2006

131

ii. Letter referring to the Circular No. 04 of 2006

132

iii. Letter referring to the Circular No. 04 of 2006

133

iv. Letter ? Compliance with the Section 2 of the Financial Transaction Reporting Act,

No. 06 of 2006

134

v. Web based information reporting system in submitting regular reports to the

Financial Intelligence Unit

135

( iv )

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