Central Bank cancels license of The Finance Company

COLOMBO (News1st): The central bank has cancelled the licence of The Finance Company PLC with effect from May 22, after it failed to recover financially following a reprieve granted last year. The monetary authority in a statement on Friday said it would compensate depositors who have not been able to withdraw their money from the finance institution set-up in 1940. "All efforts made to revive the company through different strategies have failed," the central bank said. It noted that the licence could have been cancelled on December 21 last year but an extension was granted upon a request made the company, to identify a credible investor who could uplift the finance body. The Finance Company currently holds up to Rs 23 billion worth of deposits from 145,172 depositors who had been unable to withdraw their money for the last 15 months. The central bank will settle Rs 11 billion to depositors from its Deposit Insurance and Liquidity Support Scheme, with each depositor receiving a maximum of Rs 600,000. This would see 93 percent of the total depositors -- who had deposited less than Rs 600,000 -- receiving their money in full. Those who had placed deposits above this amount would be granted the remainder following "the process of liquidation" which would involve court intervention. At the time of cancelling the license, the total asset value of The Finance Company was estimated to be Rs 10.2 billion.