The Finance Minister says it will cost a couple of million dollars to pay out investors in failed finance companies who were previously ineligible for a refund under the Retail Deposit Guarantee Scheme.
The Government is paying $1.6 billion to the 35,000 South Canterbury Finance (SCF) investors covered by guarantee scheme. SCF was placed in receivership on Tuesday.
In order to smooth out the receivership process, the Government will also repay investors whose deposits weren't covered by the scheme because they didn't meet criteria for citizenship or tax residency.
Finance Minister Bill English says depositors in other failed finance companies that were part of the scheme, but were ineligible for payment, will now also be paid out.
Torchlight Fund may be interested
Seven institutions have now triggered the deposit guarantee, including Allied Nationwide Finance, which owed $130 million to 4500 investors when it went into receivership last month.
Meanwhile it is being reported that George Kerr's Torchlight Fund may be interested in buying some of SCF's assets.
Since the receivership was announced, the New Zealand dollar has fallen threequarters of a cent against its US counterpart, though currency stategists say that's also down to gloomy global sentiment.
By the middle of Wednesday, the dollar was trading at 69.9 US cents.
