Central Bank extends term of Nation Lanka Finance Administrator

The Central Bank of Sri Lanka (CBSL) has extended the tenure of the Administrator appointed to Nation Lanka Finance PLC (NLFP) by a further six months, effective from yesterday (4), to ensure the continuity of the company’s resolution process.

P.W.D.N.R. Rodrigo, who was initially appointed in July 2025 under the Banking (Special Provisions) Act, No. 17 of 2023, will continue in the role until July 3, 2026. 

The banking regulator stated that the extension was granted to provide the Administrator with the necessary time to advance key steps in the resolution process, which includes implementing an appropriate resolution tool as permitted by the Act.

During this extended term, Rodrigo will maintain full control over all assets, operations, and affairs of NLFP, managing the company on its behalf while submitting required reports to the CBSL. 

The regulator emphasised that this decision is part of its ongoing efforts as the Resolution Authority to safeguard the interests of depositors and creditors and to protect the stability of the financial system.

The Central Bank has advised all stakeholders with financial obligations to NLFP to fulfill their contractual payments on time. These payments should be made strictly through bank accounts in the name of Nation Lanka Finance PLC, and stakeholders are requested to maintain records of all such transactions.

The Central Bank first took control of Nation Lanka Finance in July 2025 after the company failed to show satisfactory progress in reviving its critical financial condition despite multiple regulatory extensions. 

At the time of the initial appointment, the regulator noted that the company had been continuously violating provisions of the Finance Business Act, suffering from deficient capital levels and poor asset quality.

Financial disclosures prior to the takeover revealed a severe deterioration in the company’s standing. By March 31, 2025, NLFP’s total equity had turned negative with a deficit of approximately Rs. 718 million, while recording a net loss exceeding Rs. 1 billion for the financial year. 

The company’s difficulties were further highlighted when its external auditors issued a “Disclaimer of Opinion” for the previous financial year, citing an inability to obtain sufficient evidence to form an audit opinion.

The company had previously attempted to consolidate its position through the amalgamation of Kanrich Finance Ltd in 2023, a move that was part of the Central Bank’s master plan for the consolidation of the non-bank financial institution sector. However, persistent capital and liquidity issues eventually compelled the regulator to activate the resolution measures under the new Banking (Special Provisions) Act to prevent further value destruction.