Approximately 93 percent of the total depositors of The Finance Company PLC (TFC), will be compensated via the CBSL’s Deposit Insurance Scheme, while the remaining depositors will be settled after the liquidation of the company’s assets, Deputy Governor of the Central Bank H.A.Karunarathna said.
Yesterday (22 May), the Monetary Board of the Central Bank decided to cancel the finance business license issued to TFC, in terms of the Finance Business Act No. 42 of 2011 with effect from 22nd May 2020. Accordingly, TFC is not permitted to engage in Finance Business under the FBA with effect from such date.
According to the Deputy Governor, TFC currently has 145,000 depositors, with a deposit value exceeding Rs.26 Billion.
” The Deposit Insurance Scheme is allowing to pay Rs.600,000 per person and can settle Rs.11 Billion of the total Rs.26 Billion. People may ask what will happen to the balance. That will be settled using the liquidated funds ” he said.
Deputy Governor Karunarathna said, the asset base of TFC has a book value of approximately Rs.20 Billion, while its recoverable value is estimated to be around Rs.10 Billion, which will be used to settle the remaining depositors.
The Finance Company PLC (TFC), is a Finance Company, carried its finance business activities under the Finance Business Act No. 42 of 2011 (FBA) and was severely impacted by the failure of a number of financial institutions within the Ceylinco Group in 2008. Since then, the financial status of the company deteriorated gradually, leading to severe liquidity.