The Central Bank cancelled the license of Standard Credit Finance Limited with immediate effect yesterday, and warned it would take legal action against responsible parties for the mismanagement and fraudulent activities of the company.
The Standard Credit Finance Limited (TSCFL), a Licensed Finance Company licensed under the Finance Business Act No. 42 of 2011 (FBA), was facing a liquidity crisis since 2008. Depositors of the company have been unable to withdraw their money over the last ten years. All efforts made to revive the company through different strategies have failed. The continuation of the current status will be further detrimental to the interest of depositors and other stakeholders of the company, the Central Bank said in a statement.
“Therefore, the Monetary Board of the Central Bank of Sri Lanka has decided to cancel the License issued to TSCFL under the FBA, with effect from 25 July 2018. Accordingly, TSCFL is not permitted to engage in Finance Business under the FBA, with effect from 25 July 2018.”
Further, the Central Bank of Sri Lanka Non- Bank Financial Institutions Supervision Department Director has decided to cancel the Certificate of Registration of TSCFL as a Registered Finance Leasing Establishment, under the provisions of the Finance Leasing Act No. 56 of 2000 (FLA), with effect from 25 July 2018. Accordingly, TSCFL is not permitted to grant new finance lease facilities under FLA, with effect from 25 July 2018.
Sri Lanka Deposit Insurance and Liquidity Support Scheme (SLDILSS) will take the necessary actions 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. Further, depositors may be able to recover part of their remaining deposits in the process of liquidation, subject to the priority of claims.
All debtors of the company are required to pay their dues to the company through a Bank account announced by the company. The Central Bank of Sri Lanka wishes to emphasise that legal actions will be taken against the responsible parties for the mismanagement and fraudulent activities of the company.