Sri Lanka plans to set up a credit regulatory watchdog

The finance ministry in Sri Lanka has announced plans to set up a credit regulatory authority by the end of 2019.

The new regulator would be established as a separate authority from Sri Lanka’s central bank. That being said, one of the bank’s governors and two officials are proposed to be included in it.

The move comes after finance minister Mangala Samaraweera recently submitted a draft to the country’s new Credit Regulatory Act. The goal of the act and the resulting credit watchdog is to bring the nation’s largely unregulated microfinance and lending firms to heel, or at least under the influence of the law, according to a report in the Daily Mirror.

Moreover, the law would enable microfinance institutions to become members of the Credit Information Bureau, the organization launched in 1990 to give the country an efficient credit market. This would enable them to get credit reports from the organization.

While the finance ministry is still working on the final version of the bill, both the governmental body and Sri Lanka’s central bank except the act to snap into force by the end of this year.

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