The Sunday Leader

Central Finance, Key Figure In Innovative Finance Industry

The fact is that your fixed amount is in your pocket and that is the nature of this product. What many say is that you can’t touch a fixed deposit until maturity. It is not so at Central Finance. It again shows that we are willing to pay your capital or deposit at any given time as and when you want. That demonstrates the credibility of the company

 

by Roy Silva

Aruna Rajanayake, Senior Assistant General Manager – Deposits

One should not look only at the deposit interest rates when depositing their hard earned money. One must also get the proper services and also the withdrawal capacity at any given time. Also important is the rating of the Company and whether it is licensed by the Monitory Board of Central Bank of Sri Lanka. Also how rated the particular company and its financial stability in which you depend on. Those are the factors one has to concentrate on when making a deposits, says Aruna Rajanayake, Senior Assistant General Manager – Deposits.

Central Finance is one of the oldest finance companies in Sri Lanka registered under the Central Bank of Sri Lanka. It was started in 1957and celebrating 60 years of unblemished service to the Nation in this December. It shows that being in the industry for 60 years is not an easy task, and being in the business for six decades reflects the customer confidence , financial stability the Central Finance has established in the financial sector, says Mr. Rajanayake expressing his views to The Sunday Leader.

Adding to that point, Central Finance is one of the highest rated finance companies in Sri Lanka by Fitch Rating, one of the prestigious independent internationally recognized institutions. It gives the public the confidence on how capable it is on repayment of debts and deposits, etc. “Central Finance ratingis A +(lka) and we have maintained that rating for over nine years. It should also be highlighted that it is not easy to maintain that rating continuously for nine years, which shows the capability of Central Finance Company in stability, good asset quality, strong financial position, and confidence and repayment capabilities relative to peers in the financial sector. That is the background of Central Finance,” added Mr. Rajanayake.

He also noted the key innovative features introduced by the Central Finance:

 

Obtain a pre-approved loan from your Fixed Deposit and withdraw cash through an ATM Card.

Access to over 600 ATMs located island-wide day or night (24×7).

Cash withdrawals will not affect the agreed interest rate on your Fixed Deposit.

‘Hospital Cash’ special medical insurance policy can be obtained at a special premium through CF Insurance Brokers for Central Finance Depositors up to 85 years of age.

We are deposits and savings taking institution and more or less the depositors should be aware of how to maximize the benefits of their deposits. Not merely to get the monthly or maturity interest at the end of the period, but customers can also get emergency facilities.

Although people save money, if they can’t use that money, if they can’t use it for an emergency, then it’s pointless. For that purpose, we have introduced a facility for the Central Finance depositors, a Quick Cash ATM Facility. Even though you have a fixed deposit tied up with a company, you can use those funds in an emergency as an OD Facility or an Advance on 24/7 time period on 365 days.

More or less if you have a fixed deposit, you have to go to the bank and ask for loan facility and get it during the working hours. But here, if you agree with the Central Finance and fill the relevant forms and register for the advance facility, the customer is given an ATM Card, which could be used to withdraw the money against Fixed Deposit at any given time. Emergencies can happen at any time. It could be for a medical or any other need but you can use the facility at Central Finance.

 

Repayment Capacity 

And also the repayment capacity is also according to your wish. There are no hard and fast rules on repayment and there are certain restrictions. At any given time you can take up to Rs. 50,000 for a day. However, if the customer wants a higher facility, Central Finance can arrange it to get it through the ATM.

You can withdraw up to 90 per cent of the capital value of the deposit. It is a loan facility and it could be withdrawn through an ATM ranging from Rs 50,000/= up to Rs. 250,000 and any time of the day. In the repayment also we will be charging the interest only on reducing balance. So there’s no such thing that you have to pay a fixed rental or a fixed amount during the month to recover this loan facility, but as an when you have the money, you can repay the loan facility.

Having said that, you are not going to penalize the interest we are paying to you on the fixed deposit. You will earn the interest as it is. If we agree to pay you 14 per cent interest, it will be paid as it is and loan interest will be charged separately and the repayment also the customers have the facility to repay as and when they have the money. There is no fixed amount that you have to pay and until the maturity you can pay and settle the loan. Even if you can’t pay at the time of the maturity, you can extend the loan facility as well as the fixed deposit for a further period.

The new product

 

It doesn’t mean that your facility will be ceased at the time of the maturity period. It doesn’t work like that. As you wish, you can continue the deposit as well as the loan facility likewise. That is one of the new products launched by Central Finance in January for the benefit and convenience of the depositors as a value added service.

The fact is that your fixed deposit is in your pocket and that is the nature of this product. What many say is that you can’t touch a fixed deposit until maturity. It is not so at Central Finance.

 

Medical Insurance Facility

 

Another facility we have introduced recently is a Medical Insurance Facility for the existing deposit holders through our fully owned subsidiary CF Insurance Brokers. Normally medical insurance facilities are being given to the policy holders up to around 70 years or so. If you are 70 years or more, there are restrictions to get a medical insurance cover. However, if you are a deposit holder of Central Finance, as a special package, we have negotiated with an Insurance company to give that facility up to 85 years on medical insurance. The premium has to be borne by the depositor and it is a privilege we are providing to the existing deposit holders at a special premium as value added service.

This is one of the facilities we have introduced by our own Insurance Brokering Company. Central Finance has the largest insurance broking company, the CFIB, and the facility will be arranged through CFIB.

Also over and above this facility, talking about the normal facilities, we have the fixed deposits and savings accounts from new-born to the senior citizens. We have savings accounts for minors, normal and senior citizens and different types of savings facilities according to the requirements of the customer. For senior citizens, we pay a higher rate of interest up to 7.5 per cent on Savings Accounts and for minors we have two types of accounts. One is with a gift structure and the other is the higher interest rate facility. Parents may choose on the best facility for the child. If the child is one year or so, then toys and gifts are not needed and they can choose the higher interest rate. If the child is about 10 years, then gifts are preferred and that facility is available.

 

“OPTIMA”

 

Another feature is the fixed deposits that range from One to Sixty Months and the Depositor can decide on the deposit period. Traditionally, we have deposit periods for One, Three, Nine, Twelve months and likewise. But at Central Finance, there’s a deposit titled ‘Optima’, where the client can decide on the period of the deposit. For example, if one wants to make the deposit for 19 months, it could be done at Central Finance. It’s not the traditional way of making deposits. The customer can make use of it as an investment planner. For example, if customers want to collect the money after two years or so, they can build up the money from today onwards. First deposit could be made for two years to mature. If one wants to collect about Rs. 500,000 from now onwards, you can build up to collect that amount to mature on that particular date. On month by month or day by day, you can decide on the date to mature on the particular date.

So these particular investment plans, the ‘Optima’ product, is very popular among the salary earners and also the house wives. They want to build up the capital at a particular time at a higher value and also to make their dreams come true. So if they want to buy a car, a motor cycle or whatever it is, they know they are planning to save a particular amount. In other institutions also they have these facilities, but when compared to others, our rate of interest is being paid for the investment planner on this fixed deposit rate according to the period of the deposit. Hence the maturity return will be much higher than the other investment planner facilities.

Salary earners, as and when they get the salary, they set aside a certain amount to mature on a particular date. It is not a flat rate we pay. We are giving the interest applicable to fixed deposits at the time of making the deposit.

In other institutions, what they do is give a flat rate of 9 or 10 per cent for the whole two years or whatever it is.

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