February 27, Colombo (LNW): The Central Bank of Sri Lanka (CBSL) has issued a stern reminder regarding the improper use of the word ‘Finance’ in business names, stressing that such usage violates the provisions outlined in the Finance Business Act, No. 42 of 2011.
The CBSL clarified that under Section 10(2) of the Act, only registered finance companies and institutions specifically authorised by the Act are permitted to use terms like ‘finance’, ‘financing’, or ‘financial’ in their business names.
Any other entity attempting to do so, whether alone or combined with other words or their derivatives, is required to obtain prior written approval from the Central Bank.
The regulation is designed to prevent misleading business practices and ensure that the use of financial terminology is exclusive to institutions that are legally recognised and regulated within the sector.
The CBSL emphasised that failure to adhere to this requirement could result in legal repercussions, as individuals or entities found in violation of this rule are considered to have committed an offence under Section 56(4) of the Finance Business Act.
As part of this public advisory, the CBSL strongly urged all businesses and individuals to familiarise themselves with these legal stipulations and comply with the necessary procedures to avoid potential penalties.
