The Central Bank of Sri Lanka has cancelled the registration of Co-operative Leasing Company Limited (CLCL) with effect from June 10, citing repeated failure to comply with regulatory requirements, EconomyNext reported.
“The public is hereby informed that CLCL shall have no authority to carry on any new finance leasing business, except such business as it had entered into before the date on which the cancellation takes effect,” the central bank said.
CLCL had been a registered finance leasing establishment under the Finance Leasing Act, No. 56 of 2000. The CBSL said the company had acted in contravention of directions issued by the Director of the Department of Supervision of Non-Bank Financial Institutions (DSNBFI), through repeated failure to comply with the Finance Leasing (Reporting Requirements) Direction No. 2 of 2010.
The company also failed to meet the requirements stipulated under the Masterplan for Consolidation of Non-Bank Financial Institutions, despite several extensions granted to enable compliance.
“No satisfactory progress has been made by CLCL to adhere to the Masterplan and, in particular, CLCL has failed to develop a viable plan to ensure the sustainability of its business operations,” the central bank said.
The cancellation is a rare formal regulatory deregistration in Sri Lanka’s finance leasing sector. The NBFI Masterplan has been the central tool for forcing weaker non-bank lenders either to merge with stronger institutions or to wind down — Wednesday’s order is one of the strongest enforcement signals to date that CBSL is willing to revoke licences from companies that resist consolidation. Existing leasing contracts entered into before June 10 remain valid.
The CBSL has used similar enforcement powers in the banking sector, including its assurance to NDB depositors after the Rs. 13.2 billion fraud disclosure and the ongoing NBFI Masterplan consolidation push.
