Friday Dec 13, 2024
Friday Dec 13, 2024
Wednesday, 5 August 2020 03:45 - - {{hitsCtrl.values.hits}}
State-run People’s Bank, which was appointed by the Central Bank to settle compensation for depositors of three troubled finance companies, yesterday said they have disbursed over Rs. 12.8 billion to over 77,000 people from the depositor insurance scheme at the end of last month.
Having understood the Bank’s ability to serve the people, the Central Bank of Sri Lanka appointed People’s Bank as one of the State’s representative banks to commence a program to settle the compensation payments of the depositors of ETI, The Finance Company, and Swarnamahal Financial Services. The Central Bank has set up an insurance scheme to ensure the financial security of depositors of banks coming under its purview. Every bank contributes 0.1% from its total deposits to this insurance scheme. As a result, this insurance scheme has collected a significant amount of funds.
If a depositor’s funds are lost, a maximum compensation of Rs. 600,000 per depositor will be paid through this insurance scheme. Accordingly, payments commenced for The Finance payments on 2 June, and for ETI and Swarnamahal Financial Services payments on 25 July. Although initially the Central Bank of Sri Lanka transferred the funds to People’s Bank based on the order of payments to the depositors, at present, the Central Bank has made arrangements to transfer the total Rs. 20,000 million to People’s Bank. Accordingly, People’s Bank has taken the necessary steps to transfer all compensation payments to the depositors in an orderly manner.
During this time period, People’s Bank has made arrangements to pay the first instalments of compensation payments to the depositors of these finance companies through the Bank’s islandwide branch network. As at 30 July, the payments to the depositors are as follows:
Rs. 9,278 million in compensation payments have been paid to 69,078 depositors of The Finance Company
Rs. 3,338 million in compensation payments have been paid to 8,536 depositors of ETI
Rs. 309 million in compensation payments have been paid to 773 depositors of Swarnamahal Financial Services
All payments were made via People’s Bank’s islandwide branch network.
People’s Bank also issued a statement giving further details on the compensation payment process, and decrying rumours and misinformation being spread by bad faith actors regarding the same.
The full text of the statement follows:
As a State bank, People’s Bank has always represented the people of the country. On this occasion, the Bank stepped forward to help these distressed depositors and carried out the compensation payments in a transparent and trustworthy manner.
However, with the aim of furthering their narrow political agendas ahead of the upcoming General Elections, certain elements have started using social media to attack People’s Bank and the Government by sharing fake news posts.
It is the responsibility of People’s Bank to reveal the truth about these elements, who are desperately trying to mislead the general public by painting the wrong picture about the compensation payments of the above organisations by spreading fake news.
Being a State bank, People’s Bank was appointed by the Central Bank of Sri Lanka to settle the compensation payments to the depositors. While all staff members of People’s Bank diligently carried out their duties by providing their fullest support, the Board of Directors has given the necessary leadership to achieve these goals in a trustworthy manner.
As the COVID-19 outbreak is still ongoing in the country, gathering of a large number of people in a single location is risky. In order to ensure that depositors are able to visit the Bank without facing any risks and while adhering to health guidelines different times have been allocated for the depositors.
As these compensation payments are being made in the midst of the Bank’s regular banking services, the Bank bears a great responsibility to ensure the safety of the regular customers as well.
As the Central Bank of Sri Lanka, through the insurance scheme, has assigned us to pay the entire compensation amount, it is guaranteed that irrespective of whether the General Elections takes place or not the payments will be made to all depositors based on the time periods allocated.
The Bank has decided to take a time-allocation approach as it is important to take precautions as a result of the current health situation, and having won the trust of the public by making the compensation payments from inception while treating all individuals equally and fairly.
In addition to this, as a Bank that treats everyone in a humane manner, we have allocated a separate space for those individuals who go through many hardships to visit our bank branches. Most branches will be providing refreshments and comfortable chairs for the depositors who will be visiting to collect their compensation payments.
We are a Bank that has a responsibility to the people of this nation and we must ensure that these depositors who have fallen into trouble by knowingly or unknowingly dealing with deceitful financial institutions do not fall into such difficult circumstances ever again.
Being a trusted financial institution with a high level of financial management expertise, these funds will be transferred via an account at the Bank as receiving a large amount of money at once could mean the risk of losing the money when moving around while also minimising the wastage of money due to poor controlling of finances.
The recipients will be receiving a number of benefits and will be a proud stakeholder of a very stable financial institution with extensive financial capabilities. We have also informed that when it comes to depositors with Joint Accounts, all individuals concerned must be present at the Bank.
While it is a request that is in line with laws of the country, when it’s an account that is jointly operated by two individuals, the ownership of the account is shared equally by both individuals and therefore our request is a reasonable one.
This assures a greater level of transparency as the money will be handed over in the presence of both parties and therefore we believe there will not be any unnecessary complications although we must apologise for any inconvenience caused by this.
Initially, these compensation payments were made at 63 People’s Bank branches islandwide. However, when it was found out to be insufficient, it was subsequently expanded to all People’s Bank branches islandwide.
We would like to point out to all those who are spreading fake news among the general public that People’s Bank is carrying out these compensation payments while looking into the financial needs of millions of day-to-day customers.
The compensation payments are made in a methodical manner to the allocated number of recipients during a given date and time without causing any disturbances to the day-to-day customers of the Bank.
There are a lot of false stories on social media about the compensation payment mechanism. We responsibly state that stories such as collecting of unnecessary documentation, availability of applications only in English language and joint accountholders having to visit the bank to collect their compensation payments, are completely false.
As the bank with the highest number of customers, widest branch network, significant portion of the country’s financial wealth and with local and international awards, People’s Bank will always stand by the people of the country helping them to reap the maximum benefits. The trust of the people of the country is the biggest strength of People’s Bank.
We, at People’s Bank, will continue to make every possible effort to build on this trust and help Sri Lanka to become a financially strong, prosperous nation. Every rupee received by the Bank is sent to the Treasury. The Government spends on free education, healthcare services, roads and infrastructure and other development using the money in the Treasury.
Therefore, by banking with People’s Bank you are contributing towards the development of the country. People’s Bank has served each and every citizen of the country in a fair manner and has always come forward to help the people in times of need.
This has clearly been proven by the fact that we have the largest customer base in the country as the bank of the people.
