News

Committee on non-banking financial sector recommends: Ban on using force for repossession

*Report handed over to Central Bank Governor
*Abolition of illegal leasing companies recommended

By Skandha Gunasekara

The Central Bank Committee appointed to look into issues pertaining to the non-banking financial sector have recommended that using force for repossession be abolished.

Central Bank Legal and Compliance Director Sirikumara Kudagama, said the committee report had been submitted to the Governor yesterday (7).

“We submitted the report last evening. One key recommendation we have made for the short term is that the use of force to repossess property or vehicles be banned and a suitable mechanism be formulated and put in place,” he said.

He said that the Committee had recommended both long-term and short-term insights.

“Another short-term proposal we made was that illegal leasing companies be abolished, either by having them registered, or if not, having them shut down,” Kudagama said.

He noted that it had also been suggested in the report that the Central Bank issue directives to include special conditions that would ensure all agreements of leasing companies were fair.

“A lot of the personal complaints we got was that most of the agreements were one sided and favoured the leasing company.”

With regard to long-term recommendations, he said that it had been suggested to make amendments to the Finance Leasing Act.

“In the long term, it’s best that the subject be studied thoroughly and amendments be made to the Act itself,” Kudagama said.