Hon. (Dr.) Anil Jayantha

¶ 01 Hon. Speaker, on behalf of the Minister of Finance, Planning and Economic Development, I provide the following answers.

¶ 02 (a) (i) As recorded in the Parliamentary Hansard of 10.02.2021, the then State Minister of Money and Capital Market and State Enterprise Reforms, Hon. Ajith Nivard Cabraal, stated that a Cabinet Memorandum was submitted with regard to “The Finance Company PLC”. However, that Cabinet Memorandum was subsequently withdrawn by Hon. Ajith Nivard Cabraal.

¶ 03 (ii) As the said Cabinet Memorandum was withdrawn, no decision was taken thereon. Since 2019, the Central Bank of Sri Lanka (CBSL) provided several opportunities and adequate time to identify a suitable investor to restructure The Finance Company PLC, but the company failed to succeed in that process. These opportunities were given from 2019 onwards.

¶ 04 (b) (i) To liquidate The Finance Company PLC, the Director of the Department of Supervision of Non-Bank Financial Institutions filed a petition in the Colombo Commercial High Court on 16.02.2021 under case No. CHC/19/2021/CO.

¶ 05 (ii) As no Cabinet approval was obtained for restructuring, the inconsistency does not arise.

¶ 06 (c) (i) After the Monetary Board of the CBSL cancelled the licence issued to The Finance Company PLC to carry on finance business on 22.05.2020, the Sri Lanka Deposit Insurance Scheme commenced paying insurance compensation to depositors from 07.06.2020. Subsequently, at the Monetary Board meeting held on 16.03.2021, the maximum insurance compensation per eligible depositor under the Scheme was increased from Rs. 600,000 to Rs. 1,100,000. Further, the Board approved amending the Scheme regulations and paying the additional Rs. 500,000 to those depositors of The Finance Company PLC who had already been paid under the previous limit. Payment of the additional Rs. 500,000 commenced on 12.04.2021.

¶ 07 (ii) Under the relevant Acts, Orders and Regulations governing the Sri Lanka Deposit Insurance Scheme, payments to depositors of The Finance Company PLC under the Scheme were made up to 21.05.2024. Accordingly, Rs. 12.96 billion has been paid to 36,479 depositors.

¶ 08 (iii) Using the funds of the Scheme, there is no provision to pay the full amounts due to all depositors; only insurance compensation up to a maximum of Rs. 1,100,000 per eligible depositor of a member institution can be paid.

¶ 09 (iv) Under the Banking (Special Provisions) Act, No. 17 of 2023 and regulations thereunder, the maximum compensation per eligible depositor per institution under the Scheme is Rs. 1,100,000. Further, under those provisions, the maximum compensation limit applicable to both Sri Lanka Rupee deposits and foreign currency deposits is Rs. 1,200,000.

¶ 10 (v) The decision regarding deposit mobilization exceeding Rs. 950 million in January 2019 was taken by the management of The Finance Company PLC, within the deposit limits imposed by the Central Bank.

¶ 11 (d) Does not arise.