By Madhusha Thavapalakumar -- Despite the Central Bank of Sri Lanka (CBSL) stating that it is running out of options and is seriously considering cancelling the license of The Finance Company (TFC), the company is still optimistic of being able to carry on its operations. “There are some positive outcomes from our plans, and bringing investors certainly takes some time”, TFC Chairman B.A. Wasantha Kumarasiri told The Sunday Morning Business on Friday (31). He made this comment when we contacted him to obtain his reaction to the statements made by CBSL Deputy Governor H.A. Karunaratne on the future of TFC, during the first Monetary Policy Review of 2020, on Thursday (30) at CBSL. Karunaratne noted that the Monetary Board of the CBSL has taken certain measures with regard to TFC and added that it is not viable for TFC to continue their business as the CBSL has not seen any investors coming in so far. “To resurrect TFC, there are few options. One is either we need to see a new investor, or there should be injection of fresh funds by the Government. Central Bank cannot inject any funds. Also, we have not seen any investor for this particular company,” Karunaratne noted. In the event neither of the aforementioned options is fulfilled, Karunaratne noted that the CBSL’s only option would be to cancel the license of TFC, as notified to TFC on 23 October last year. However, Karunaratne added that the CBSL is looking at whether the Government is willing to consider any other options to revive TFC. “If there are no other options, we have to ahead and cancel the license and assist the large number of depositors who are regularly requesting their funds,” the Deputy Governor added. According to Karunaratne, TFC has 145,000 depositors, out of which 135,000 depositors’ funds are less than Rs. 600,000. “If we cancel TFC’s license we can help this 94% of the depositors,” he noted. The CBSL issued a notice of cancellation of the license issued to TFC in a letter dated 23 October. The notice was given due to the “continuous violation” of the Finance Business Act Directions, including minimum core capital, capital adequacy, and liquid assets requirements as well as “the critical financial condition of TFC” due to negative capital, a poor liquidity position, continuous losses, significantly deteriorated asset quality, and poor governance practices. This notice follows several regulatory measures taken with effect from 15 February 2019. The CBSL issued a notice saying that TFC was severely impacted by the failure of a number of financial institutions within the group in 2008 and since then, the financial status of the company deteriorated gradually and was with severe liquidity issues which need to be addressed immediately. In May 2019, the Monetary Board extended the regulatory actions taken on TFC for three months with effect from 15 May. Issuing a statement, the CBSL said that this step was taken under the provisions of the FBA, and assured that the interest due on deposits was to be paid continuously. On 15 September 2019, the CBSL said that TFC had not found a suitable investor to revive the company and it was now vital to find an acceptable investor to bring in equity capital to TFC within an agreed timeframe in order to avoid further deterioration of the financial condition of the company. Therefore, in October, the Monetary Board instructed TFC to call for expression of interest (EOI) from potential investors with immediate effect, and to request such investors to submit their business restructuring proposals to revive TFC. However, TFC failed to attract an investor through the EOI, citing the unfavourable environment in the country, at that time. TFC called for a second EOI on 2 January. It was the final chance given to the TFC to call for an EOI by the CBSL. The status of the second EOI is yet to be known. According to TFC, prospective investors should comply with a minimum equity investment of Rs. 25 billion, either individually or jointly.