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Friday February 23rd, 2024

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.

Sri Lankans may need to wait for Monetary Board meeting minutes despite new Act

ECONOMYNEXT – Sri Lankans may have to wait more time to read the meeting minutes of the Central Bank’s Monetary Board, a top official said, despite a new act that has made the central bank to be more transparent and accountable for its decisions.

Many central banks including the United States’ Federal Reserve, India’s Reserve Bank, and Bank of Mexico release the minutes of their monetary policy meeting to ensure transparency.

The new Central Bank Act passed by the Parliament in line with the guidance by the International Monetary Fund (IMF) includes measures for Sri Lanka’s central bank to be more transparent and accountable.

These measures include releasing the Monetary Policy Report every six months and the first such report was released on February 15.

However, the central bank has not taken a decision to release the minutes of the Monetary Board meetings on the monetary policy.

“Going forward, one day this could happen,” Chandranath Amarasekara, Assistant Governor at the Central Bank told reporters on Wednesday (21) at a media briefing.

“Right now, we have just started working on the new Central Bank Act. We are not there yet. There is no such decision on releasing minutes yet.”

The central bank in the past printed billions of rupees to keep the market interest rates artificially low and provide cheap funding for successive governments to propel a debt-driven economy.

It’s decision, however, led Sri Lanka into an unprecedented economic crisis in 2022 with sovereign debt default.

It also propped up the rupee currency artificially in the past to maintain a stable exchange rate at the expense of billions of US dollars. The move also contributed for the economic crisis and later the central bank was forced to allow over 60 percent depreciation in the rupee in March 2022.

However, none of the top central bank officials was held responsible for wrong decisions to hold interest rates artificially low with money printing and propping up the rupee. (Colombo/Feb 23/2024)

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Amid mass migration, Sri Lanka to recruit volunteers as English teachers

ECONOMYNEXT- Sri Lanka is planning to appoint foreign and expatriate volunteers to teach English for Sri Lanka students, the Ministry of Higher Education said, amid thousand of teachers migrating to other countries after the island nation’s unprecedented economic crisis.

Over five thousand teachers have left the country with the Education Ministry permission using the government’s circular of temporarily leaving state jobs while tens of thousands of teachers have left the country without informing the relevant authorities, Education Ministry officials say.

That had led to an acute teacher shortage in the country.

Suren Raghavan, the State Minister for Higher Education said the shortage has aggravated because most of the graduates who have an English degree become writers and join the private sector due to higher salary.

“They do not join government schools. This is a problem all over the country which is why we need to have an online system,” Raghavan told EconomyNext.

Separately he said on Thursday at a press conference that he had spoken to Canadian and Australian High Commissions to get the assistance of where their English teachers who have experience in teaching English as a second language in South Asia.

He also said that there is a number of teachers in the Unite Kingdom have shown interest in teaching English and they have experience in teaching in other Asian countries such as Burma and India while the teaching would be done free of charge.

The new move also comes at a time when the country’s English literacy rate is on the decline, according to the Minister.

President Ranil Wickramasinghe announced the English-for-all initiative three months ago with plans to improve English literacy at school and university level. (Colombo/Feb 23/2024)

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Sri Lanka tea production up 1.4-pct in Jan 2024, exports up 6.8-pct

ECONOMYNEXT – Sri Lanka’s tea production was up 1.4 percent to 18.73 million kilograms in January 2024, with high growns falling and low and mid growns rising, industry data shows.

High grown tea in January 2024 was 3.56 million kilograms, down from 3.36 million, medium growns were 2.6, up from 2.5 million kilograms and low growns were 12.56 million, up from 12.32 million kilograms last year.

Exports, including re-exports were up 6.88 percent to 18.76 million kilograms, industry data published by Ceylon Tea Brokers show.

Export earnings were reported at 102 million US dollars, up from 99.5 million dollars last year. The average FOB price was 5.45 US dollars a kilo down from 5.67 dollars last year.

Tea in bulk was 8.5 million kilograms valued at 12.79 billion rupees, tea in packets was 7.8 million kilograms valued at 13.1 billion rupees and tea in bags was 1.8 million kilos, valued at 5.06 billion rupees.

The top buyer was Iraq with 2.5 million kilos, up from 2.1 million last year followed by the UAE with 1.99 kilos, up from 1.86 million last year.

Russia bought 1.98 million kilos, down from 2.0 last year, Turkey bought 1.72 million kilos, from 2.3 million last year, while Iran bought 1.32 million, up from 614 million last year. (Colombo/Feb23/2024)

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