LOLC Holdings PLC has issued a public statement in response to online news reports regarding loan facilities of up to Rs. 20 billion obtained from People’s Bank.
In its clarification, the company has provided details regarding the nature of the collateral used for the transaction.
However, it has not disclosed the actual financial details, including the amount of the loan obtained.
Media reports have stated that according to a board resolution dated Sept. 04, 2026, of LOLC Mauritius Holdings Limited, the company’s US dollar fixed deposits had been pledged as collateral to obtain loan facilities of up to Rs. 20 billion from People’s Bank for LOLC Holdings PLC.
Although LOLC says that it “categorically rejects the misleading narrative being created around this transaction”, it doesn’t entirely refute media reports concerning this arrangement.
The clarification states : “The fundamental fact is straightforward: the local-currency borrowing is secured against a US-dollar deposit maintained with People’s Bank itself.”
Neither does it clarify how much has actually been drawn down from the maximum loan facility of Rs. 20 billion.
It also does not disclose the value of the US dollar deposit pledged as collateral, the specific terms under which a deposit held by LOLC Mauritius Holdings Limited was used to secure a loan facility for LOLC Holdings PLC, or whether the loan facility has been activated.
Furthermore, while LOLC says the transaction is fully secured by collateral, the Chairman of People’s Bank previously told ‘Sri Lanka Mirror’ that the information in the relevant document did not match the information held by the bank.
Economic experts have pointed out that it is the company’s responsibility to explain the reason for this discrepancy.
However, analysts have also stressed that using a US dollar deposit as collateral to obtain a rupee-denominated loan facility does not, by itself, establish that an irregularity has occurred.
They say specific information on the actual loan amount, the value of the collateral and the status of the transaction is needed to clarify the issues arising from the board resolution, LOLC’s explanation and the statement made by the Chairman of People’s Bank.
Economic analysts further point out that the public expects clear answers from both LOLC and People’s Bank, while considering the company’s clarification.
Previously, Damith Priyadarshana, a University of Moratuwa graduate, small-scale investor in the Sri Lankan stock market, and social activist, had published information concerning the Rs. 20 billion People’s Bank loan involving LOLC through his Instagram account, damnit_invest.
The relevant video as well as the clarification by LOLC Holdings PLC’ are as follows:
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