Sri Lanka regulator action has intensified after the central bank warned the public against unauthorized deposit taking by RD Media Earning Hub, following an investigation that found violations of the Finance Business Act governing financial institutions.
Sri Lanka regulator flags unauthorized deposit activity by RD Media
Sri Lanka regulator oversight has tightened after the Central Bank of Sri Lanka issued a formal warning against RD Media Earning Hub (Pvt) Ltd, citing unauthorized deposit taking from the public. The warning follows an investigation carried out under Section 42 of the Finance Business Act No. 42 of 2011, which governs entities permitted to accept deposits and conduct finance business in the country.
According to the central bank, the investigation determined that RD Media Earning Hub and its directors had accepted deposits in a manner that contravened provisions of the act. Authorities found that funds were collected from the public through mechanisms described as security deposits, investment agreements, or similar arrangements, none of which were permitted under the regulatory framework.
The Sri Lanka regulator emphasized that only licensed finance companies and banks are legally allowed to accept deposits from the public. Any entity operating outside this framework exposes depositors to significant financial risk, as such firms are not subject to prudential supervision, capital adequacy requirements, or depositor protection mechanisms.
In its directive, the central bank ordered RD Media Earning Hub to immediately cease accepting deposits in any form. The company was also instructed to repay all remaining deposit liabilities owed to the public. This step reflects the regulator’s intent to limit potential losses and prevent further exposure of individuals to unauthorized financial schemes.
Sri Lanka regulator warnings of this nature are typically issued after substantial evidence of non-compliance is established. By invoking the Finance Business Act, the central bank signaled that the violations were not procedural lapses but fundamental breaches of financial law. Such breaches can carry serious legal and financial consequences for both corporate entities and their directors.
The central bank has repeatedly cautioned the public to verify whether an institution is licensed before placing funds in any deposit or investment scheme. Unauthorized deposit-taking entities often operate by offering attractive returns or alternative contractual structures that resemble legitimate financial products, making it difficult for ordinary investors to distinguish regulated firms from unregulated ones.
In this case, the use of terms such as investment agreements and security deposits was highlighted by the regulator as misleading. Regardless of the terminology used, accepting repayable funds from the public without proper authorization constitutes deposit taking under Sri Lankan law. The regulator’s clarification aims to close loopholes that unlicensed entities may attempt to exploit.
Sri Lanka regulator enforcement actions also serve a broader objective of preserving financial system stability. Unregulated deposit schemes can undermine confidence in the financial sector, particularly if they collapse and leave depositors unable to recover funds. By intervening early, authorities seek to contain systemic risk and reinforce compliance standards.
For depositors already affected, the directive to repay outstanding liabilities offers a potential pathway to recovery, although the outcome will depend on the company’s financial position and adherence to the regulator’s instructions. The central bank has not disclosed further enforcement steps at this stage but retains the authority to pursue legal action if compliance is not achieved.
The warning adds to a growing list of public advisories issued by the central bank against unauthorized financial operators. These advisories underscore the regulator’s increasing vigilance amid rising public interest in alternative investment and earning platforms, particularly those promoted through digital channels.
Sri Lanka regulator guidance remains clear: members of the public should deal only with institutions licensed or registered by the central bank and should exercise caution when approached with deposit or investment offers that fall outside the formal financial system.