Relief for IFL depositors shortly
People's Leasing Company will commence negotiations to pay part of
the interest to depositors of the crisis hit Industrial Finance Ltd.(IFL),
said CEO, People's Leasing Company Ltd., D.P. Kumarage.
He was addressing the media on the Credit Guarantee Scheme (CGS)
launched by the Central Bank early this year for registered finance and
specialised leasing companies that encounter liquidity problems.
Kumarage said that People's Leasing will revive operations of the IFL
when it receives the loan under the CGS and added that discussions with
depositors will commence soon.
He said a detailed business plan will be formulated to revive and
resume operations of the collapsed Industrial Finance Ltd. Deposits of
Industrial Finance are around Rs. 900 million of over 3000 depositors.
People's Leasing Company Ltd. is the managing agent of IFL which has
been in business for several years and ran in to difficulties following
the loss of trust by depositors. The institution was headed by Deepthi
Perera at the time of the turmoil.
Finance companies and specialised leasing companies can obtain loan
facilities from banks against their real estate and financial assets
under the CGS.
Many financial companies are unable to sell their assets in real
estate due to the rise in property prices.
The loan will help companies to improve liquidity and resume
businesses.
Senior Deputy Governor, Central Bank, D. Dheerasinghe said a few
registered finance companies are negotiating with the banks to obtain
loan facilities and added that discussions are expected to be finalised
soon. The first loan facility is being availed by Industrial Finance
Ltd.
Deputy Governor, Central Bank, P.D.J. Fernando said finance companies
are expected to honour the obligations to depositors and creditors.
Companies cannot use the loan facility to carry out daily businesses.
The credit guarantee is provided by the Central Bank.
The total loan facility will initially be Rs. 120 million and the
interest charged will be according to market rates.
LF
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