The Monetary Board of the Central Bank (CB) has decided to cause the Director, Supervision of Non-Bank Financial Institutions to make an application to a competent court for the winding up of defunct Finance Company, ETI Finance Limited (ETIF).
Having considered the non-availability of a viable plan to revive the Company through a capital infusion and the continuing insolvent position, the Monetary Board decided to cause Director, Supervision of Non-Bank Financial Institutions to make an application to a competent court for the winding up of ETIF in terms of Section 31(5)(b) of the FBA.
The Panel of Management shall continue to manage the affairs of ETIF and facilitate the winding-up process.
The decision was made in terms of Section 31(5)(b) of the Finance Business Act, No. 42 of 2011 (FBA).
Due to the various irregularities that took place since 2011 and the inability of the Board of Directors and the Senior Management of ETIF to address the resultant issues, the Monetary Board 2018, issued Directions to the directors of the Company and appointed a Panel of Management to oversee the affairs of the Company.
Even though the Monetary Board directed the Board of Directors of ETIF to bring suitable investor(s) to revive the Company, no viable investment proposal was available and the financial condition of the Company continued to deteriorate.
In the meantime, 30% of ETIF deposits were repaid in 2018 and 2019.
Having considered the continuously deteriorating financial condition and non-availability of a viable revival plan, the Monetary Board decided to suspend the business of ETIF in terms of Section 31(1) of FBA with effect from 13th July 2020.
By the end of 2020, a sum of Rs. 8,941.6 million has been paid for 65% of the insured depositors out of the total of 37,586, up to a maximum of Rs. 600,000/- per insured depositor, covering 99.9% of the Rs. 8,955.4 million of eligible compensation under the Sri Lanka Deposit Insurance and Liquidity Support Scheme (SLDILSS).
Even though, the recovery of loans continued during the suspension period, there was no considerable amount recovered by the Company.
SLDILSS will continue to pay compensation payments to the eligible depositors of ETIF, who have not received their compensation payment so far, up to a maximum of Rs. 600,000/- per depositor.
Further, the remaining depositors of ETIF are eligible to claim their dues in the winding-up process. However, the legal actions against the Directors and other wrongdoers will continue without any hindrance. All debtors of ETIF are advised to pay their dues to ETIF on time, only through the specified bank account under the name of ETIF, and maintain records for all payments to avoid any possible litigation against them for non-repayment of dues.