Greater flexibility to Licensed Finance Companies to raise funds from foreign sources

Sri Lanka, April 16 -- The Monetary Board of the Central Bank has issued new directions on foreign currency borrowings by Licensed Finance Companies (LFCs) with a view to provide flexibility for LFCs to obtain low-cost funding from foreign sources to support their business expansions.

The objectives of these directions are to stabilise any financial volatilities created by the foreign funding exposures of LFCs and provide a risk management framework for such foreign currency borrowings.

Prior to these directions, CBSL permitted LFCs satisfying criteria such as utilization for purposes with national interest, maturities over 5 years, complying with the prudential requirements, etc. to raise foreign currency borrowings on a case-by-case bas...