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Wednesday, 30 November 2016 00:13 - - {{hitsCtrl.values.hits}}
Central Bank Governor Dr. Indrajit Coomaraswamy yesterday said the Monetary Board had taken action against controversial primary dealer Perpetual Treasuries but stopped short of providing details, citing legal constraints and market sensitivities.
At the tail-end of recounting a slew of new measures taken to promote the credibility of the Government securities market, the Governor noted that on 7 and 25 November the Monetary Board had taken action against Perpetual Treasuries but refused to be drawn into giving details despite questions from journalists.
“On primary dealers an internal committee headed by an Assistant Governor has been tasked with proposing new regulatory mechanisms to strengthen primary dealer operations. Recommendations are expected to be finalised before the end of the year. A subject of grave interest to the public has been the operations of Perpetual Treasuries. The onsite examination of Perpetual Treasuries has been completed and the Monetary Board has considered the examination and took action on 7 November and further action on 25 November but at this point I’m afraid I can’t give you any details because of legal and other reasons. But I can assure you action has been taken and in due course you will become aware of those actions the Monetary Board has taken,” Dr. Coomaraswamy said.
Dr. Coomaraswamy also recapped that discussions were ongoing with distressed finance companies, with a separate resolution division being set up within the non-bank financial institutions department along with a separate enforcement unit to persecute Boards of Director and senior management of failed finance companies that have been involved in fraud. The Monetary Board has approved the establishment of a special investigation unit to deal with ponzi schemes around the country that will include police offices on its staff. The department is also moving towards a risk-focused supervisory mechanism to understand the viability of finance institutions.
Responding to questions on plans announced by Finance Minister Ravi Karunanayake to restructure the Central Bank, the Governor denied the politicisation of the institution. However, Dr. Coomaraswamy welcomed upgrades and the legal reform of the Monetary and Banking Acts to give stronger powers to the Central Bank to regulate sections of the financial system including ponzi scheme operators and primary dealers.