Sri Lanka’s central bank warns against Singhe Capital Investment after an investigation found the company had allegedly accepted public deposits in violation of the Finance Business Act, prompting the regulator to issue a directive prohibiting further deposit-taking activities.
Sri Lanka’s central bank warns against Singhe Capital Investment over deposit taking
The Central Bank of Sri Lanka said its investigation, conducted under Section 42(10) of the Finance Business Act, No. 42 of 2011, determined that Singhe Capital Investment Limited had accepted deposits from the public by issuing Promissory Notes and/or Commercial Papers, an activity that contravenes the provisions of the law.
According to the regulator, the investigation concluded that the company engaged in unauthorized deposit-taking without the legal authority required under Sri Lanka’s financial sector regulations. The Central Bank said such activities fall outside the scope permitted under the Finance Business Act and therefore constitute a breach of the legislation governing finance businesses.
As a result, Sri Lanka’s central bank warns against Singhe Capital Investment and has directed the company to immediately cease accepting deposits from the public.
The regulator also held two directors of the company responsible for the violations identified during the investigation. The individuals named in the directive are Kankanan Gamaralalage Sugath Wasantha Kumara Rathnawardana and Chandika Yasnath Bandara Weerakoon.
In its official notice, the Central Bank instructed Singhe Capital Investment Limited and its two directors to refrain from accepting any further deposits from members of the public.
The action forms part of the Central Bank’s ongoing efforts to strengthen oversight of Sri Lanka’s financial system and protect depositors from unauthorized financial activities. The regulator has repeatedly cautioned the public against placing funds with institutions that are not licensed or authorized to accept deposits under applicable financial laws.
Under the Finance Business Act, only institutions that have obtained the necessary regulatory approval are permitted to conduct deposit-taking business. Companies operating outside this framework may expose investors to significant financial risks, as they are not subject to the same prudential supervision, capital requirements and consumer protection standards applicable to licensed financial institutions.
The use of Promissory Notes and Commercial Papers as fundraising instruments is not prohibited in itself. However, where such instruments are used in a manner that effectively amounts to accepting deposits from the public without the required authorization, regulatory action may be taken under the Finance Business Act.
The Central Bank of Sri Lanka regularly publishes notices warning the public about entities found to be conducting unauthorized financial activities. These actions are intended to promote transparency, maintain confidence in the financial system and reduce the risk of financial losses among investors.
The latest directive does not specify any financial penalties or further enforcement measures at this stage. However, the regulator’s findings underscore the importance of ensuring that companies involved in financial services operate within the legal framework established by Sri Lankan law.
Sri Lanka’s central bank warns against Singhe Capital Investment serves as another reminder for investors to verify whether an institution is licensed before investing or placing funds with any financial entity. The Central Bank continues to encourage the public to deal only with regulated institutions authorized to accept deposits, helping safeguard both investor interests and the stability of Sri Lanka’s financial sector.