The Central Bank Tuesday defended the recent allegations made against the monetary institute that its ineffectiveness has led to the collapse of several financial institutions in the country.
Issuing a communiqué the Central Bank said in the past few weeks, in the aftermath of the difficulties faced by the Central Investments and Finance PLC (CIFL), a finance institution registered under the Finance Business Act (FBA), many allegations have been leveled against the bank and claims have been made by various persons.
The Bank said the reality of the situation is however quite different and therefore, it has decided to publish a notice to apprise the general public about the reality surrounding the various allegations and claims.
Responding to the allegation that the Central Bank has been ineffective in dealing with the several rounds of finance company failures, the Bank explained that over the past 7 years, not a single finance company has collapsed, and consequently had to be liquidated.
Some finance companies have encountered stresses during that period, but those companies have been restructured in a gradual manner to regain financial strength, the Central Bank noted.
The Central Bank pointed out that there are many Non-Bank Financial Institutions (NBFIs) that are managed well in conformity to the laws and directions of the Central Bank, and these continue to perform well giving satisfactory returns to all its stakeholders, including depositors.
Countering the claim that the short-term assessment for the NBFI sector is very bleak, the Central Bank said the NBFI sector is playing a key role in the economy of the country, and all indications are that they would continue to do so.
"The NBFI sector will continue to play a significant role in the short, medium and long term economic growth of the country and this sector will continue to remain stable, whilst performing in a satisfactory manner by providing returns to its depositors and shareholders, whilst also being of benefit to the hundreds of thousands of customers who benefit by their services and the thousands of employees who work in this sector," the monetary authority said,
Full statement of the public notice: