Central Bank to file winding up action against ETI Finance Ltd

The Central Bank (CB) is to initiate winding up action against ETI Finance Ltd (ETIF), in a local court soon, the CB revealed on Tuesday.

The CB Monetary Board has decided to direct  the Director, Supervision of Non-Bank Financial Institutions to make an application to a competent court for the winding up of ETI Finance Limited (ETIF), in terms of the Finance Business Act, No. 42 of 2011 (FBA).

The Panel of Management shall continue to manage the affairs of ETIF and facilitate the winding up process.

The Sri Lanka Deposit Insurance and Liquidity Support Scheme (SLDILSS) will continue to pay compensation payment to the eligible depositors of ETIF, who have not received their compensation payment so far, up to a maximum of Rs. 600,000 per depositor.

Further, the remaining depositors of ETIF are eligible to claim their dues in the winding up process.

This action will be taken against the ETIF due to the various irregularities taken place since 2011 and inability of the Board of Directors and the Senior Management of the finance company to address the resultant issues, the CB announced.

The Monetary Board on 02nd January 2018 has issued directions to the directors of the company and appointed a Panel of Management to oversee the affairs of the company.

Even though the Monetary Board directed the Board of Directors of ETIF to bring suitable investor(s) to revive the company, no viable investment proposal was made by the management of the company.

Having considered the continuously deteriorating financial condition and non-availability of a viable revival plan, the Monetary Board decided to suspend the business of ETIF with effect from 13th July 2020.

During the period of suspension, payment of compensation for the insured depositors under the Sri Lanka Deposit Insurance and Liquidity Support Scheme (SLDILSS) was commenced through the island-wide branches of the People’s Bank.

By end 2020.a sum of Rs. 8,941.6 million has been paid for 65 percent of the insured depositors out of the total of 37,586, up to a maximum of Rs. 600,000/- per insured depositor.

Such amount covers 99.9 percent of the Rs. 8,955.4 million of eligible compensation under SLDILSS. (BS)