May
22
'The Finance Company PLC' license cancelled

'The Finance Company PLC' license cancelled - 'The Finance Company PLC' license cancelledHiru Gossip, Hiru news, Gossip Lanka News | Hirugossip | Hiru Gossip | Hiru Fm Gossip | Hiru Gossip Official Web Site | Gossip Lanka

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Central Bank of Sri Lanka (CBSL) has decided to cancel the finance business licence issued to TFC, with effect from 22nd May 2020.
 
Accordingly, TFC is not permitted to engage in Finance Business under the Finance Business Act No. 42 of 2011 with effect from such date.

Further, the Director of the Department of Supervision of Non- Bank Financial Institutions of the Central Bank of Sri Lanka (CBSL) has decided to cancel the Certificate of Registration of TFC as a Registered Finance Leasing Establishment under the provisions of the Finance Leasing Act No. 56 of 2000.
 
Central Bank of Sri Lanka states that all efforts made to revive the company through different strategies have failed and the continuity of current status will be further detrimental to the interest of the depositors and other stake holders of the company. Further, the depositors of TFC were unable to withdraw their money over the last fifteen months.
 
The statement further states that as previously informed by the Press Release dated 23rd October 2019, The Monetary Board of the Central Bank of Sri Lanka (MB) issued a Notice of Cancellation (NOC) of the finance business licence issued to TFC, in terms of the powers vested under the FBA, with effect from 23rd October 2019, in order to safeguard the interests of the depositors and other stakeholders of TFC.
 
The Sri Lanka Deposit Insurance and Liquidity Support Scheme of the CBSL will take necessary actions to pay compensation to the insured depositors under the applicable laws and regulations which would facilitate to settle 93% of the company’s total depositors in full (135,100 depositors out of 145,172 total depositors), while each of the remaining 7% depositors (10,072 depositors) will also receive Rs.600,000/-as a part of their deposit amount and the remaining balance may be able to recover in the process of liquidation subject to the priority of claims. Further information regarding the payment of compensation will be communicated in due course.
 
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 a severe liquidity crisis.
 
The Central Bank has given the following contact details for clarifications;
 
Department of Supervision of
Non-Bank Financial Institutions
 
Cancellation of the licence
 
011 2477573
011 2477229
011 2477504
 
Resolution and Enforcement
Department
 
Payment of compensation
under Deposit Insurance
 
011 2398788
 
The Finance Company PLC
 
Deposits
 
011 2557888
011 2580210
 
 
 
Pawning Advances
obtained from the company
 
071 1359248
 
 
 
Other facilities obtained from the company
 
071 4086248
071 1864361
 
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