The Central Bank of Sri Lanka has decided to cancel the license of the Standard Credit Finance owing to the liquidity crisis which the company had been facing since 2008.
In a public statement issued by the Central Bank, the Bank’s Monetary Board noted the cancellation of the license was in the best interest of its depositors and other stakeholders.
“Depositors of the company have been unable to withdraw their money over the last 10 years. All efforts made to revive the company through different strategies have failed. The continuity of current status will be further detrimental to the interest of depositors and other stakeholders of the company,” the statement read.
The directive which comes into effect from 25th of this month would also prevent the finance company from operating, as dictated under the Finance Business Act No 42 of 2011. The company is not permitted to grant new finance/lease facilities either.
“The Sri Lanka Deposit Insurance and Liquidity Support Scheme (SLDILSS) will take necessary action to pay compensation to the insured depositors of TSCFL up to a maximum of Rs.600,000/per depositor as per the regulations of the SLDILSS,” the statement read. “The depositors may be able to recover part of their remaining deposits in the process of liquidation subject to the priority of claims.”