Compensation to depositors of failed finance companies increased to Rs.1.1 mln from Rs. 600,000

The Monetary Board of the Central Bank of Sri Lanka (CB) has decided to increase the maximum compensation payment under SLDILSS from Rs.600,000 to Rs.1,100,000, by Rs.500,000.

This decision has been taken to provide further relief to the depositors of financial institutions regulated by CB in the event of a cancellation or suspension of the licences of such institutions.

Accordingly, the depositors of six finance companies, namely, Central Investments and Finance PLC (CIFL), The Standard Credit Finance Limited (TSCFL), TKS Finance Limited (TKSFL), The Finance Company PLC (TFC), ETI Finance Limited (ETIFL) and Swarnamahal Financial Services PLC (SFSP) whose licences have been cancelled or suspended by the Monetary Board are eligible to receive the revised compensation amount, the CB said in a media release.

The depositors of the aforementioned companies who have yet not obtained any compensation payment are also requested to apply for compensation under the revised maximum amount of Rs.1,100,000.

The Resolution and Enforcement Department of the CB is currently taking necessary measures to commence the payment of additional compensation expeditiously. The payment mechanism and the date of commencement of payments under the increased compensation threshold will be notified by the CB in due course.

The increase of the maximum compensation payment will result in an additional payment of Rs.9.8 billion for the depositors of the six (06) companies, while the percentage of depositors that can be fully compensated will be increased to 94 per cent.