CB hotline urged to save depositors

As concern grew over deposits in many financial institutions, several depositors say the Central Bank (CB) should set up a hot-line to assure the public that their investments are safe and for other information.

"For a quick response to our concerns, there is no one," said one anxious investor who called this newspaper. "The companies in which we have placed deposits are not going to tell us the facts even if we ask them. The Central Bank should step in and be available to the public 24 hours a day so that we can find out whether our investments are safe," the depositor, a retired pensioner, said, adding: "Trying complaining to the Central Bank now? It's difficult."

Scores of people have been calling the newspaper seeking information on the future of banks, finance companies and other deposit-collecting institutions (not registered with the CB) after the Sakvithi scam and even, more after the Golden Key Credit Card Company crashed.

Golden Key is part of the giant Ceylinco Group and the crisis spread to a subsidiary, Seylan Bank where concern over a possible run on deposits led the Central Bank to step in and hand over management to the state-owned Bank of Ceylon (BoC).

This week, investors at ABC Credit, another local credit card company run by a former Golden Key manager, were also worried and company officials were due to have a meeting with depositors in the Kandy branch two days ago – on the lines of Ceylinco Group Chairman Lalith Kotelawala's meeting with depositors.

Depositors, many of who declined to be named, said even though the Central Bank had no regulations to control non-registered companies, a crisis like Golden Key could spill over to the entire financial sector. "Then the regulator has to step in, like it or not," a corporate executive said, adding that, "it's better to be proactive than reactive in the current context where a crisis is brewing, also because of the global financial crisis.'

Last Monday, hundreds of depositors gathered outside the Golden Key’s Bambalapitiya head office where officials said they would be notified when refunds would be made. Depositors were told that interest payments had been suspended. The company crashed after a run on its deposits by some depositors fearing a collapse.

The CB has in various statements this week assured the public not to panic and transact business as usual with all banks, including Seylan, and registered financial institutions.

Meanwhile, Ceylinco Group of Companies chairman Lalith Kotalawala in a statement last night said that as promised the Golden Key Company had begun refunding the deposits from the smallest value upwards.

He said the company the Golden Key Company was only one among the Ceylinco Group of Companies and that the value of the security deposits of the Credit Company was not the speculated Rs 26 billion but less than half that amount.

“The Ceylinco Group has over its 65-year-old history, faced a bomb threat, riots, a tsunami and many dangers and trials. We have with us our customers who love Ceylinco and have been our clients from generation to generation,” Mr. Kotalawala said.

He assured that the refunding of the security deposits of the Golden Key Credit Company was being done in such a manner without destabilizing any of the Ceylinco Group companies.

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