Committee on Public Finance asks CBSL to formulate people-friendly strategic plan

• Committee says CBSL cannot behave in same way as commercial banks
• Says its strategic plan should work in the interest of the public
• Committee Chairman says Monetary Board should fulfil its responsibilities, maintain financial discipline
• Committee also discusses reduction in sugar tax, allegations of corruption in sugar imports

The Committee on Public Finance informed officials of the Central Bank of Sri Lanka (CBSL) to come up with an innovative strategic plan that works in the interest of the public, calling on CBSL not to act like State or commercial banks which are profit and ratings oriented.

Chairman of the Committee on Public Finance MP Anura Priyadharshana Yapa stated that the Monetary Board should fulfil its responsibilities properly and that maintaining financial discipline is a fundamental factor for any country. Yapa directed CBSL officials to submit a report on new development strategies to the Committee which prioritises the uplifting of local entrepreneurs.

The Committee Chairman’s comments came after CBSL officials informed that the bank had managed to maintain a large savings balance of $ 323 million as of 19 February, under a scheme to open a special deposit account in order to protect local cash reserves in the face of the COVID-19 pandemic.

The Committee pointed out that such good deposit schemes introduced by the CBSL should be publicised, as this savings special deposit account earns an interest of 2% per annum on deposits, something which is beneficial to the country as well as Sri Lankans abroad.

Meanwhile, State Minister Vidura Wickremanayake and MP Nalin Fernando pointed out that the harsh criticism levelled at the government over the losses incurred as a result of the sugar tax revision has been a black mark on the government and did not benefit the consumers as expected.

Yapa said that the committee had not yet received the report requested by the Public Finance Committee in this regard, and that the Department of Import Control should be able to submit a data analysis pertaining to the gazettes issued with regard to reducing the sugar tax.

The Committee on Public Finance approved the regulations issued on that day regarding the issuance of brown sugar licenses and recommended that a full explanation be given on 9 March, with the participation of all relevant Ministries and Institutions, on the previous sugar tax reduction.

The Committee also approved two extraordinary gazette notifications regarding the extension of the duration of two projects under the Strategic Development Act No. 14 of 2008 submitted by the Ministry of Finance.

One such project is a 75-room city hotel located at No. 116 Galle Road, Colombo 3.

State Minister Susil Premajayantha pointed out that the project had failed at the outset and that the Sri Lanka Insurance Corporation (SLIC), Litro Gas and the Employees Provident Fund, have spent about Rs. 20 billion – of which Rs. 4 billion has been spent on settlement payments to a Malaysian company.

Premajayantha said the hotel, which currently has only 16 floors, would cost at least another Rs. 40 billion before it could be used and could not be expected to be successful.

Moreover, the Committee was informed that the previous management of SLIC was directly responsible for the four to five-year delay in the construction of the Sinolanka Spa Hotel, which resulted in pay-out to a Malaysian company.

Yapa said the Board of Investment should have paid attention to this matter and requested that a feasibility study on this hotel project be submitted to the Committee soon.

State Ministers Susil Premajayantha, Vidura Wickremanayake, MPs Ranjith Bandara and Nalin Fernando were present at the meeting which was held earlier this week.