Courtesy Adaderana

The government has decided to pay compensation up to Rs. 600,000 to all insured depositors of The Finance Company PLC (TFC) which is to be liquidated.

Cabinet Spokesperson Minister Bandula Gunawardena stated this during the media briefing to announce Cabinet decisions today (04).

This will solve the issue of 93% of the TFC depositors, Minister Gunawardena said, noting that there is a 7% of depositors who had made deposits more than Rs. 600,000. Accordingly, the balance amount of these depositors will be settled after the properties of the TFC are liquidated.

The issue of TFC was discussed at length with Prime Minister Mahinda Rajapaksa, the Cabinet Spokesperson added.

In the meantime, the Central Bank of Sri Lanka (CBSL), in a statement issued today (04), said the compensation will be paid as per the Regulations of Sri Lanka Deposit Insurance and Liquidity Support Scheme.

The balance amount if any, will be settled after liquidation of properties belong to TFC. The compensation payments will be made through the People’s Bank as the agent bank appointed by CBSL for this purpose,” it read further.

The first phase of the compensation payment for the individual depositors having a single deposit, will commence on 07 June 2020 at People’s Bank branch locations where TFC branches were previously operated, the CBSL added.

The license issued to TFC to carry on finance business has been cancelled with effect from 22 May 2020, in terms of the provisions of the Finance Business Act No. 42 of 2011.