Comments /749 Views / Saturday, 12 August 2017 00:17
Retired Deputy Governor in his FT column says according to media reports, an SMS, alleged to have been retrieved from the iPhone of Arjun Aloysius and presented to the currently-sitting Presidential Commission to Investigate and Inquire into the Issuance of Treasury Bonds, had spoken of an attempt at obtaining, through a Parliamentarian, a paper submitted to the Monetary Board.
He says the reference to the ‘Monetary Board’ here is to the Monetary Board of the Central Bank of Sri Lanka, the corporate body entrusted by Parliament to decide on the monetary policy and matters relating to the stability of financial institutions.
We have heard of a Deputy Governor in (2008-2011) who was Secretary of the Monetary Board, who is rush out of boardroom to call the then Bond King Ajith Devasurendra to give him interest rate information. As Wijewardane says regarding the current controversy: “It may still be an attempt only, but it points to a lapse in the maintenance of the confidentiality of the affairs of the Monetary Board of the Central Bank.” He further states: “This is not something which civil society should treat lightly or play ignorance or apathy.”
What is more important today is to hold the Central Bank Management accountable for their actions. Take the case of the recent accounts breach in a big private bank. Hatton National Bank (HNB) shocked the business community and its high net worth customers when it attached their personal information including their financial worth onto a television promotion brochure. It was only a few months ago HNB claimed publicly that they set a new record in private banking by offering a gamut of personalised advisory services, from investments to travel – in addition to other personalised services enjoyed by customers.
The bank claimed it is seeking to set a new benchmark in terms of customer convenience in the country’s high net-worth domain. Hardly a few months went by, the bank created history by exposing the account numbers, the email addresses, home details and the balances.
Where in the world would a bank make such a crazy blunder? In Swaziland or even in Gambia the financial systems are well regulated. Central Bank supervision should also be held responsible for this situation. It shows the poor quality of the Central Bank audits, the work quality of the external auditors in this case Ernst and Young, the incompetence of the Bank internal audit, and finally how poorly the Board of Directors are conducting the affairs of the bank.
Banks are compelled by law to have a Board Audit Committee and a Risk Committee. Their role is to identify and prevent breaches of any kind that can risk the depositors’ money or their reputation that can create a run on the bank creating pandemonium in the financial sector.
A core function of the bank is to protect the information it has obtained from its customers. When they fail to do that, the regulator is duty bound to do whatever it is required to protect the shareholders and the depositors. In this case the Central Bank is only attempting to safeguard the Board and the management, not the depositors or the shareholders.
Tough action at least must be taken against the Board and they should not be allowed become a directors of any financial institution in the future. The Board and the management must be strengthened immediately. The profiles of the Non-Executive Directors show that only one Director out of the 12 has even worked in a bank. What is the Central Bank doing to correct this situation?
Governor, your slip is clearly showing. It is time to act or hand it over to a younger professional in the Central Bank who deserves the job after serving the bank for 25 years, while you looked for greener pastures oversees, but was fortunate to get this big job in the midst of chaos in the Central Bank and your connections to a Minister.
A HNB Account Holder
18 August 2017
How did some nations, like a Japan, China, United Stated, become wealthy and powerful, while others remain stuck in poverty? And why do some of those powers, from ancient Rome to the modern Soviet Union, prosper for periods and then collapse? Pol...
18 August 2017
I am amazed – and amused – by the spate of “ministerial responses” to Ravi’s exit last week. The Prime Minister has promised to expedite the backlog of anticorruption cases his administration appears to have shelved f...
18 August 2017
Home truths Organisations and their employees takerisks and also managerisksevery day. Of course, it is a part of the business and the service delivery operations. However, often, the management of risks is confined...
17 August 2017
Last week, the Yahapalana Government, which came on the promise of good governance and weeding out corruption, had its first blow, when a senior minister and deputy leader of the party had to resign over allegations of corruption. Whils...