Minimum Core Capital Directions under the Microfinance Act

MONETARY BOARD
CENTRAL BANK OF SRI LANKA

27 October, 2016 | MICROFINANCE ACT DIRECTIONS | NO. 01 OF 2016

MINIMUM CORE CAPITAL

Issued under Section 11 of the Microfinance Act, No. 6 of 2016.

1. Minimum Core Capital
   1.1. Companies applying for the licence on or before January 15, 2018
   Every Licensed Microfinance Company (LMFC) shall at all times maintain a core capital at a level not less than Rupees One Hundred Million (Rs. 100,000,000/-) and maintain a core capital at a level not less than Rupees One Hundred and Fifty Million (Rs. 150,000,000/-) from January 15, 2019.

   1.2. Companies applying for the licence after January 15, 2018
   Maintain a core capital at a level not less than Rupees One Hundred and Fifty Million (Rs. 150,000,000/-).

2. Regulatory measures in the case of non-compliance
   2.1. Where a LMFC has failed to comply with these Directions:
   a) The total amount of deposit liabilities and debt shall be capped at the level as at the end of the month in which the non-compliance was confirmed, and b) The LMFC shall not pay dividends, until the minimum capital requirement is complied with and is confirmed to the satisfaction of the Director/ Department of Supervision of Microfinance Institutions.

3. Core capital of the company
   3.1. Core capital of the company shall include the following;
   a) Issued and fully paid Ordinary Shares. Provided, however, in calculating core capital in regard to a company applying for a licence under this Act issued ordinary shares shall be considered as paid up only if they are issued for cash. b) Issued and fully paid non-cumulative non-redeemable Preference Shares. Provided, however, in deciding core capital in regard to a company applying for a licence under this Act, issued non cumulative, non redeemable preference shares shall be considered as paid up only if they are issued for cash. c) Statutory Reserves d) General Reserves e) Retained profit or loss as shown in the last audited statement of account f) Unpublished current year’s profit/(loss)

(Signature)

Indrajit Coomaraswamy
Chairman of the Monetary Board
Governor of the Central Bank of Sri Lanka

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