Deposits in approved finance companies

Monday, 21 March 2016 00:00 - - {{hitsCtrl.values.hits}}

In accordance with Section 9.2 of the Sri Lanka Deposit Insurance schedule regulations, compensation of insurance for deposit liabilities (Rs. 300,000 per member maximum) will be paid to deposit-holders in the event of the collapse of a finance company.

It was Rs. 200,000 maximum per deposit-holder up to 31.12.2014 and increased to Rs. 300,000 per deposit-holder effective 01.01.2015. This was advertised by the finance companies when calling for deposits from the public. However, it will be paid only when the license for the registration of the said institution is suspended or cancelled by the Monetary Board.

This is very important. Can the Central Bank of Sri Lanka issue the list of collapsed finance companies whose deposit-holders were paid compensation under this respective scheme to date, together with the dates of cancellation of licence and dates of repayment? The public should know how effective this advertised insurance scheme is.

It appears that it takes even more than five years to settle the insurance claims. What is the purpose in making compensation to grandchildren when grandparents suffer and die due to mental agony caused by the loss of their valuable deposits?

Can the public at large expect an early reply from the Central Bank of Sri Lanka duly published in the press in this regard?

S.R. Balachandran BSc. FCA, FCMA (Sri Lanka)