State Minister of Money and Capital Market and State Enterprise Reforms Ajith Nivard Cabraal said the Government has already made a payment up to Rs.600,000 to each person who had deposits in six finance companies which crashed during the tenure of the former Yahapalana Government. In addition to the Rs.600,000, the Central Bank has also decided to pay another Rs.500,000 to each person bringing the total amount to be paid to a depositor to Rs.1.1 million, the State Minister told the Sunday Observer yesterday.
The Government has already paid Rs.25 billion to depositors and another Rs.10 billion will be paid in the near future, he said. Altogether, it would cost the Government around Rs. 35 billion to make these payments.
“We have enough money to make these payments as we had prudently set up the Deposit Insurance Fund (DIF) during the tenure of former President Mahinda Rajapaksa. With the use of the money in the DIF, the Government has been able to make payments and provide relief to 94 percent of the total number of depositors,” he said.
State Minister Cabraal said during the past five years of the Yahapalana regime, six finance companies crashed leaving some 60,000 depositors in the doldrums. Thereafter, we ensured that the DIF will make payments to the affected depositors.
The ceiling that was placed on the payment to affected depositors was Rs.600,000. Those who had less than Rs.600,000 were paid in full, but anyone above Rs.600,000 was paid only up to Rs. 600,000. The Government through this process paid for thousands of depositors who were facing severe hardships.
He said thereafter Prime Minister Mahinda Rajapaksa was very keen to provide further redress to the depositors who were in absolute distress and President Gotabaya Rajapaksa has also given his consent towards this end.
Therefore, the Prime Minister as the Finance Minister gave instructions to make those payments. At present, the Central Bank has decided to pay a further Rs.500,000 to the depositors and that will be provided in the near future. Altogether, each depositor will get Rs.1.1 million which means 94 percent of them would have been paid in full.
He said during the tenure of the then President Mahinda Rajapaksa, we didn’t permit a single finance company to fail. We protected them and revived them. We looked after the financial sector. When 19 banks all over the world were failing and financial institutions were crashing during the worst time of the global economic recession, we didn’t permit even a single financial institution in Sri Lanka to fall and they were performing well. Some had difficulties but we looked after them as well.
The State Minister said, “Emphasis will also be laid if more depositors need to be paid. Let’s see how it goes in the next few weeks and months. We will deal with the remaining depositors and ensure that the loss they suffered will be at the lowest possible level.