It has been observed that certain individuals and entities mobilize funds from the public by issuing various instruments. Promissory Notes, Commercial Papers and Debentures are few of them. It should be mentioned that certain categories of institutions raise funds by issuing the above mentioned instruments in order to meet their financial obligations. Though these products may be attractive in terms of return, individuals should ensure the appropriateness of such funds for their purposes.
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Mobilization of Funds from the Public by Issuing Various Instruments
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Cancellation of the License Issued to Lankaputhra Development Bank Limited
The Monetary Board of the Central Bank of Sri Lanka has granted approval in terms of section 76F read with section 9(9) of the Banking Act No. 30 of 1988 (as amended), to cancel the licence issued to the Lankaputhra Development Bank Limited in terms of the Banking Act, No. 30 of 1988 (as amended), with effect from 01st April 2019, with the completion of the merger of Lankaputhra Development Bank Limited with Pradeshiya Sanwardhana Bank, as proposed in the Government Budget 2016.
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Revoking of the Suspension of Business of Natwealth Securities Limited
The Monetary Board of the Central Bank of Sri Lanka, acting in terms of the Local Treasury Bills (Primary Dealers) Regulations No. 01 of 2009 and the Registered Stock and Securities (Primary Dealers) Regulations No. 01 of 2009, has decided to revoke the suspension of NatWealth Securities Limited from carrying on the business and activities of a Primary Dealer from 4.30 p.m. on 30th November 2019.
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Monetary Policy Review - No. 7 of 2019
The Monetary Board of the Central Bank of Sri Lanka, at its meeting held on 28 November 2019, decided to maintain its accommodative monetary policy stance with the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank remaining at their current levels of 7.00 per cent and 8.00 per cent, respectively. The Board arrived at this decision following a careful analysis of current and expected developments in the domestic economy and the financial market as well as the global economy. The decision of the Monetary Board is consistent with the aim of maintaining inflation in the desired 4-6 per cent range while supporting economic growth to reach its potential over the medium term.
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Regulatory Actions taken by the Central Bank of Sri Lanka on The Finance Company PLC
The attention of the Central Bank of Sri Lanka (CBSL) has been drawn to certain information published in newspapers and news websites on 26th November 2019 regarding the regulatory actions taken by the CBSL on The Finance Company PLC (TFC) and it wishes to clarify the following.
The CBSL issued a notice of cancellation of the licence granted to TFC to carry on finance business under the Finance Business Act No. 42 of 2011 (FBA) on 23rd October 2019. The CBSL also informed that in terms of the provisions of the FBA, the company has the right to submit an acceptable proposal for investment in TFC along with proof of funds for capital infusion and a Business Restructuring Plan for the consideration of the CBSL within 30 days from the date of issuance of such notice.
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Inflation Increased in October 2019
Headline inflation as measured by the year-on-year change in the National Consumer Price Index NCPI, 2013=100)1 increased to 5.6 per cent in October 2019 from 5.0 per cent in September 2019. The monthly increases of prices of items in the Food category contributed to this increase. Accordingly, Food inflation (Y-o-Y) increased to 7.3 per cent in October 2019 from 4.9 per cent in September 2019. However, Non-food inflation (Y-o-Y) recorded 4.3 per cent, continuing its decreasing trend observed since May 2019.
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Beware of Online Scams - Protect Your Bank Passwords and PINs
The Central Bank of Sri Lanka has received information regarding several types of financial frauds and scams being operated through social media, and Internet-based applications. Recently, an increase of these types of scams has been observed.
Most of these scams are conducted through easy loan schemes that attract the public. During such fraudulent loan approval processes, the fraudsters lure the public to share confidential customer information such as their bank account numbers and the customer’s personal identification numbers. The fraudsters then use such confidential information to access customer accounts and steal customers’ money.
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The Central Bank Expresses its Strong Objection to the Contents of the Statement Released by Fitch Ratings
The Central Bank of Sri Lanka strongly objects to the statement released by Fitch Ratings on 21 November 2019 titled “Sri Lanka Election Result Increases Policy Uncertainty”, as it depicts the complete opposite of the realised positive market response to the outcome of the Presidential elections, followed by the assumption of duties by His Excellency the President and ongoing key appointments.
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External Sector Performance - September 2019
The trade deficit widened in September 2019 (year-on-year), with the decline in earnings from exports exceeding the decline in expenditure on imports. Nevertheless, the trade deficit remained significantly low in the first nine months of 2019 over the same period of last year, as a result of increased cumulative earnings from exports and a sharp decline in cumulative expenditure on imports. Meanwhile, the drop in tourist arrivals was contained further in September 2019. Workers’ remittances rose (year-on-year) in September 2019, although declining on a cumulative basis. In the financial account, foreign investment in the CSE and the government securities market recorded net outflows in September 2019. Despite some depreciation pressure in the month of September, the Sri Lankan rupee remained appreciated against most major currencies during the first nine months of the year.
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Sri Lanka Purchasing Managers’ Index - October 2019
Manufacturing PMI increased to 57.6 index value in October 2019 mainly due to increase in Production and New Orders compared to September 2019.
The increase in Production and New Orders was observed especially in manufacturing of food and beverages sector to meet the upcoming festive season demand. Meanwhile, Employment also increased in manufacturing of food & beverages and wearing apparel sectors. This was mainly due to the recruitment of new employees to increase the production levels to meet the higher demand in the period ahead.
Although the New Orders and Production expanded at a higher rate, the Stock of purchases remained broadly unchanged due to accumulated stocks brought forward from previous months.Further, Suppliers' Delivery Time lengthened at a slightly higher rate.