CB to resolve issues at 3 defunct finance companies

Business

The Central Bank (CB) will soon be putting in place resolution plans for three defunct finance companies, CB Governor Dr. Indrajit Coomaraswamy told a monetary policy review media conference in Colombo on Thursday.

He said a resolution mechanism for the repayment of depositors of these companies will be introduced soon.

The three finance companies are The Standard Credit Finance Ltd., City Finance Corporation Ltd and Central Investments and Finance PLC.

All three companies got into a chronic financial position due to fraud and mismanagement of funds and, therefore, these companies did not have assets to pay off deposits.

All previous restructuring efforts made by the CB from time to time, could not produce envisaged results as those who managed these companies failed to arrange an infusion of new capital.

The CB will complete the required administrative procedures and communicate details to all those depositors and investors. Once the repayment plan is legally finalised, those companies will be dealt with through applicable laws for liquidation.

The deposit base of the three finance companies was around Rs.1 billion and the number of depositors was 6000.(Bandula)

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