Criteria Adopted in Registering Companies to carry on Finance Business

Basic Requirement
Public companies registered under the Companies Act No. 17 of 1982 and having a
specified minimum amount of capital, are considered for registration as finance companies.
The Finance Companies Act has stipulated Rs. 5 million as the minimum issued and paid up
capital. However, the Monetary Board, taking into consideration the fall in value of money
and expansion in business activities, has decided that the issued and paid up capital of a
company commencing finance business should at least have Rs. 200 million.

A. Criteria for Registration

A public company which meets the minimum capital requirement specified above is
registered, if the Monetary Board, on the information made available to it, is satisfied that
its registration would not be detrimental to the interests of its depositors and other
creditors.
For consideration of registration as a finance company, the following documents and
information are required :
- A copy of the Manual of Operations
- A certified copy of the Auditors confidential letter to the board of directors at the
completion of their audit for the last financial year.
- Memorandum & Articles of Association *
- Certificate of Incorporation *
- Latest forms 13, 36, 48 and 63 *
* (Each has to be certified by the Registrar of Companies)

Projections of deposits, lending and profit and loss for the first 03 years.
Feasibility Report on establishing the company.
Organization Chart
Confirmation from the Auditors on the availability of capital
A declaration from the Board of Directors of the company that the company has met
all regulatory and statutory requirements.
Tax clearance certificate.
Experience and qualifications of the members of the Board of Directors and the senior
management of the proposed company.

In addition, if an existing company acts as the promoter of the proposed finance

company, the following information and documents should also be forwarded together
with the application:
- Memorandum and Articles of Association of the promoting company.
- Resolution passed by the Board of Directors to form a new company with an issued
and paid up share capital of not less than Rs. 200 million for the purpose of carrying on
finance business.
- Qualifications and experience of the members of the Board of Directors of the
promoting company.
- 10 major shareholders of the promoting company.
- Audited annual accounts of the promoting company for the last 3 years.
- List of companies in the promoters group together with details of major business
activities of each company and each companys relationship to the promoting
company.
- Whether there are any loss making companies in the group.
Further information will be requested if necessary.
B. Licensing
After registering as a finance company the Monetary Board issues a licence to such
company to carry on finance business.