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Sunday December 10th, 2023

Opposition complains to regulator, People’s Bank chief says followed procedure

Samagi Jana Balavegaya Members after lodging the complaint at the Central Bank

ECONOMYNEXT – The main opposition Samagi Jana Balavegaya (SJB) has lodged a complaint against the head of People’s Bank for granting a loan to a firm he is a partner in, but Chairman Sujeewa Rajapakshe says he followed the ethical process required for such an approval.

In a complaint to the Central Bank of Sri Lanka (CBSL), SJB Member of Parliament Mayantha Dissanayake said that a Working Capital loan of LKR23mn had been approved for BDO Partners, of which firm Rajapakshe is a managing partner.

Dissanayake in his complaint, according to a press release issued by SJB, alleges that the loan was granted in violation of the Banking Act.

The relevant portion of the Act reads “a licensed commercial bank shall not grant any accommodation to a concern in which any director of the licensed commercial bank has a substantial interest, being an interest acquired either before or after the appointment as the director, unless such security as may from time to time be approved by the Monetary Board is given and such accommodation is sanctioned at a meeting of the Board of Directors of the licensed commercial bank by the votes of not less than two-thirds of the number of its directors other than the director concerned.”

Asked about the process, Rajapakshe said that his firm has been a client of the People’s Bank for more than thirty years and that when the Board had to approve of this particular loan for his company he declared his interest in it and was not present in the room when the vote was taken.

“This is the standard process that we are expected to follow,” he told EconomyNext.

The complaint was handed over to the Director of Bank Supervision of the Central Bank, the regulatory authority of the People’s Bank, the SJB said.

The Working Capital loan is offered to companies in order that they can pay salaries and utility bills during the two-month period of March and April 2019, during the COVID 19 Pandemic.

The SJB Press Release said that their complaint was based on a media report. (Colombo, March 1, 2021)

Reported by Arjuna Ranawana

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  1. R Wannithantrii says:

    Here We GO Ha! Ha! Ha!. The Probe of irregularities at Peoples Bank the long Game played by the Minister of Finance has not seen the light of day. Retirees conducting probes and investigations dragging their feet for their lively hood.

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  1. R Wannithantrii says:

    Here We GO Ha! Ha! Ha!. The Probe of irregularities at Peoples Bank the long Game played by the Minister of Finance has not seen the light of day. Retirees conducting probes and investigations dragging their feet for their lively hood.

ADB USD200mn loan for Sri Lanka economic stabilization efforts

ECONOMYNEXT – The Asian Development Bank (ADB) has approved a US 200 million dollar concessional loan to Sri Lanka to help stabilize the country’s finance sector.

The Financial Sector Stability and Reforms Program comprises two subprograms of IS 200 million dollars each, according to a statement by the ADB.

“The program’s overarching development objective is fully aligned with the country’s strategy of maintaining finance sector stability, while ensuring that banks are well-positioned for eventual recovery,” ADB Country Director for Sri Lanka Takafumi Kadono was quoted as saying in the statement.

“The expected development outcome is a stable financial system providing access to affordable finance for businesses in various sectors of the economy.”

The ADB statement continues:

“Subprogram 1 targets short-term stabilization and crisis management measures that were implemented in 2023, while subprogram 2 is planned to be implemented in 2024 and focuses on structural reforms and long-term actions to restore growth in the banking sector.

The program will help strengthen the stability and governance of the country’s banking sector; improve the banking sector’s asset quality; and deepen sustainable and inclusive finance, particularly for women-led micro, small, and medium-sized enterprises.

According to the International Monetary Fund’s (IMF) latest review, Sri Lanka’s economy is showing tentative signs of stabilization, although a full economic recovery is not yet assured.

The program is a follow-on assistance from ADB’s crisis response under the special policy-based loan that was approved for Sri Lanka in May 2023.

It is aligned with the fourth pillar of the IMF’s Extended Fund Facility provided to Sri Lanka to help the country regain financial stability.

It is also in line with the government’s reform agenda, including strengthening the operational independence of the Central Bank of Sri Lanka (CBSL) and its designation as the country’s macroprudential authority.

In designing this subprogram 1 loan, ADB has maintained close coordination and collaboration with the IMF to design targeted regulatory reforms for the banking sector—including the asset quality review—and with the World Bank on strengthening the deposit insurance scheme.

“The loan is accompanied by a $1 million grant from ADB’s Technical Assistance Special Fund to provide advisory, knowledge, and institutional capacity building for Sri Lanka’s Ministry of Finance and CBSL.”

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Sri Lank in blackout as power grid hit by cascading failure

ECONOMYNEXT – Sri Lanka suffered a blackout as Saturday evening as the state-run Ceylon Electricity Board grid was hit by a cascading power failure.

The cascading failure is believed to have been triggered by the failure of the Kothmale-Biyagama transmission line.

“The Ceylon Electricity Board wishes to inform our customers that due to the failure of Kotmale – Biyagama main transmission line, an island wide power failure has occurred,” CEB Spokesman Noel Priyantha said.

“Step by step restorations are underway and it may take few hours to completely restore the power supply.”

With hydro plants running flat out, a outage of the line tends to create a big imbalance in the demand and supply, leading to tripping of more lines and generators.

Lines can trip due to lightening strikes, or equipment failures.

Sri Lanka last suffered a cascading failure in December 2021, due to the failure of the same transmission line.

RelatedSri Lanka power blackout as grid hit by cascading failure

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Sri Lanka to host regional Food and Agriculture Organization conference

ECONOMYNEXT – Sri Lanka will host the 37th session of the Asia Pacific Regional Conference (APRC) of the United Nations Food and Agriculture Organization (FAO), from February 19-22, 2024 in Colombo.

The Conference will bring together agriculture ministers and officials from 46 countries across the region to discuss challenges in food and agriculture.

“The 37th APRC will provide a vital platform for regional collaboration, benefitting the agricultural landscape, fisheries sector and environment of Sri Lanka,” Minister Mahinda Amaraweera said at a press briefing on Friday (8) to announce the conference.

FAO has had an active presence in Sri Lanka for over 40 years. “FAO has supported the country in the implementation of Good Agricultural Practices (GAP), and the development of the fisheries sector for growth and climate resilience,” Vimlendra Sharan, FAO Representative for Sri Lanka and the Maldives said.

“The APRC conference will be an opportunity to highlight the innovative approaches introduced in partnership with the government.”

By hosting APRC, Sri Lanka hopes to demonstrate the country’s dedication to the growth of sustainable agriculture, and showcase its commitment to sustainable agricultural development.

The APRC agenda will include a forum on agritourism, especially requested by the Sri Lankan government.

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