The Central Bank of Sri Lanka (CBSL) has launched a major compensation programme to protect insured depositors of Nation Lanka Finance PLC (NLFP) following the cancellation of the company’s finance business licence, marking another critical intervention aimed at safeguarding public confidence in the country’s financial system.
Starting from August 1, 2026, eligible insured depositors of Nation Lanka Finance will receive compensation payments through selected People’s Bank branches under the Sri Lanka Deposit Insurance Scheme (SLDIS). The maximum compensation payable will be Rs.1.1 million from the aggregate deposits held by each depositor, according to the CBSL.
The move follows the cancellation of Nation Lanka Finance’s licence to conduct finance business under the Finance Business Act No.42 of 2011. The licence was revoked with effect from July 3, 2026, under Section 66(2) of the Banking (Special Provisions) Act No.17 of 2023.
The CBSL said the compensation mechanism has been designed to provide depositors with multiple payment options. Eligible customers can receive over-the-counter cash payments, transfer funds into existing People’s Bank accounts, or open new accounts with People’s Bank to receive their compensation.
However, depositors will need to complete specific procedures before payments are released. Claim forms must be submitted with supporting documents, including original deposit certificates, identification documents used when opening accounts, and any other relevant proof required by authorities.
Depositors who already maintain People’s Bank accounts and whose total NLFP deposits are below Rs.5,000 have been given a special facility to submit their completed claim forms and documents electronically through the designated email address.
The compensation process also includes provisions for joint depositors and individuals unable to personally submit claims. Joint account holders must submit separate claim forms, while those unable to appear in person must authorize legally valid Power of Attorney holders to complete the process on their behalf.
The CBSL has allowed insured depositors or legal beneficiaries to claim compensation until July 2, 2032, providing a lengthy window for eligible parties to access their entitled payments.
Financial analysts say deposit insurance mechanisms play a vital role in maintaining confidence among small and medium-scale savers, particularly during periods when licensed financial institutions face instability. The government-backed compensation process is expected to reduce uncertainty among thousands of affected depositors.
The CBSL has urged depositors to obtain official claim forms and instructions through its website or from selected People’s Bank branches. Additional information is available from the Deposit Insurance and Resolution Department of the Central Bank through its official contact channels.
The Nation Lanka Finance case highlights the importance of regulatory supervision, transparency and effective resolution mechanisms in protecting depositors and maintaining stability within Sri Lanka’s financial sector.