New legislation to regulate micro finance companies
Monday, July 29, 2013
Legislation to regulate and supervise microfinance institutions, including finance companies and banks accepting deposits from the public, will be introduced in Parliament. The initiative comes from President Mahinda Rajapaksa in his capacity as the Minister of Finance and Planning. He has recommended to ministers a three-tier system.
In tier one, large MFIs (micro financing institutions) will come under direct supervision and examination by the Central Bank of Sri Lanka (CBSL). In the second, small MFIs will be under the supervision and examination by the CBSL-approved audit firms which will report to the CBSL for enforcement of regulatory action.
The third tier, according to President Rajapaksa, will bring in all institutions falling under the Commissioner of Co-operative Development and Registrar of Co-operative Societies, the Divineguma Department and the Board of Management of Divineguma community-based banks and banking societies. The Commissioner General of Agrarian Development will be exempted from the CBSL regulation and will come under the regulation and supervision of the authorities already empowered under the relevant statutes.