Misleading statements on deposits

It is true that our Central Bank is having an attentive eye on the operation of approved Finance Companies to safeguard the interest of deposit holders. It should be clearly understood that Central Bank is not guaranteeing the return of deposit or accumulated interest or both.

It should take constructive steps to rectify the situation. With effect from January 1, 2012, Rs 200,000 of total deposits per person per Finance Company is secured by Sri Lanka Deposit Insurance Scheme of the Central Bank. This is a very good move.

Regrettably some Finance Companies are sending circulars stating that all deposits without any limitation, are covered under this insurance scheme. This is a misleading statement and the deposit holders may fall into trouble.

Hopefully the Central Bank will intervene in this matter and issue severe warning to all Registered Finance Companies for publishing such statements which violates Central Bank regulations.

Strictly speaking, all circulars to public at large calling for deposits should be approved by the Central Bank before publication.

It is hoped that the public at large would be benefited by this information.

- S. R. BALACHANDRAN