Kanrich Finance will repay the fixed deposits and promissory notes of its existing depositors as part of the first step of a new operation to merge with another financial company, a spokesman for the company told Lankasara.
In response to the announcement published by the Central Bank today (30), the spokesperson stated that if the company’s capital is less than the required limit stipulated by the Central Bank, a new company will be floated alongside Nation Lanka Finance Company. He told Lankasara that the approval of the Central Bank’s Monetary Board had been received for the purpose.
He further said, “Kanrich Finance has been a strong financial institution for a long time.” Last year too, the company made a profit of 180 million rupees.
But our company’s capital fell short of the required amount set by the Central Bank. According to the Central Bank rule, a financial institution should have a minimum capital of two billion rupees. In 2018, our total capital was around 1.8 billion. But the capital of our company decreased by about 700 million rupees due to the write-off of bad loans given by the good governance government to the bad debt holders.
Meanwhile, the Central Bank revised the minimum initial capital limit to 2 billion rupees to operate a finance company. Here, we need to grow our capital to stay in business. Nation Lanka Finance, which is currently under the control of a new investor, was the best opportunity we received.
Together with this company, we have taken steps to increase our capital to more than LKR2.5 billion. This project has also been approved by the Central Bank’s Monetary Board.
The first condition of this process approved by the central bank is that all the money currently invested in Kanrich Company’s fixed deposits and promissory notes should be given back to the respective depositors. This is what is happening now. However, we will continue our financial business through this merger. He mentioned.
He further mentioned that many companies in recent history were unable to repay their depositors’ money. However, the spokesperson further stated that the company has the ability to fully pay interest on existing deposits and will continue to work in the financial business with Nation Lanka Finance, which has a capital of around 2.5 billion rupees.
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