CBSL has failed to control finance companies’ crisis AKD

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By 2018-01-24

By Methmalie Dissanayake

Stressing that although the monitoring mechanism for distressed finance companies has been taken over by the Central Bank of Sri Lanka (CBSL), it has failed to control the crisis situation which several finance companies are facing at the moment, Chief Opposition Whip and Janatha Vimukthi Peramuna (JVP) Leader Anura Kumara Dissanayake yesterday (23) queried as to how the Government hopes to control the rising crisis in the financial sector. Dissanayake made this remark while asking a question under the Standing Orders Number 23/2. He said, "There was a breakdown which occurred when Pramuka Bank collapsed in 2002.

Then there was 'Sakvithi type' frauds in 2008 and the Golden Key issue in 2009. The Finance and Guarantee Company of the Ceylinco Group also collapsed. The CBSL later transferred the control of the Finance and Guarantee Company, first to the Merchant Bank and then to the Union Bank. After that, the Union Bank took over the company and established a new entity under the name 'U.B. Finance Company Limited'." "However, this new company has failed to follow the instructions of the CBSL. Although 10 years have passed, the issues faced by the depositors of the Finance and Guarantee Company still remain the same. The depositors have not been given their deposits and interests they should have been given as promised," Dissanayake asserted.

"The same thing has happened to the depositors of the Central Investments and Finance PLC Bank, which had to be shut down in 2013. There are 4,159 depositors and there is no mechanism to address their issues as well." "Now the Edirisinghe Trust Investment Finance (ETIF) Limited is in a crisis situation. There are around 35,300 depositors in the ETIF and the Swarnamahal Financial Services (SFSP). Their total deposits are around Rs 36 billion and they are worried about the future of their deposits. I would like to ask the Government whether they have a mechanism to provide a solution for these problems. I also would like to know a time frame to solve them if there is any," he queried.

Responding to Dissanayake, Leader of the House Minister Lakshman Kiriella said that the Prime Minister will give a detailed reply to Dissanayake's questions within a few days.

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