Mangala denies plans to privatise People’s Bank

• Says privatisation talk is politically motivated to mislead people 
• Effort to amend the People’s Bank Act is to increase capital and make it more operationally effective 

Finance Minister Mangala Samaraweera yesterday denied the Government was planning to privatise People’s Bank, terming Opposition statements as being “completely false and misleading”. 

The Finance Minister, releasing a statement, said some political parties and the trade union affiliated to those parties had alleged the Government was to privatise the People’s Bank citing financial difficulties to infuse capital. 

“But there is no truth in these allegations and the Government categorically dismisses this claim of privatisation as false and misleading the people made with ulterior motives,” the statement said.   

“It is understood that this baseless allegation is made following the proposal made by the Ministry of Finance to amend the People’s Bank Act No. 29 of 1961, enabling the bank to increase the authorised capital and the debentures to strengthen the financial stability and effectiveness of its operations. Once this amendment is passed in Parliament the employees and depositors can get these securities and there is no intention to issue equity securities to outsiders,” the Minister said.

The Budget 2019 speech highlighted the need to develop capital markets beyond bank financing, he recalled. 

“Therefore, I wish to emphasise that the attempts on the part of political parties to portray that the government is trying to privatise the People’s Bank is a malicious attempt to hide their political bankruptcy. There is no attempt on the part of the Government or the Ministry of Finance to privatise the People’s Bank as stated in the media,” he added.  The Janatha Vimukthi Peramuna (JVP) over the weekend accused the Government to attempting to privatise People’s Bank by issuing new shares to raise capital. The JVP said that any move to change or dilute the ownership of People’s Bank could have serious consequences for the economy.