By Dharisha Bastians
President Maithripala Sirisena announced from his official Twitter account yesterday that a new Central Bank Governor would be appointed over the next few hours, ending weeks of suspense and political deadlock about the potential reappointment of the controversial incumbent, Arjuna Mahendran.
But the announcement only sparked more drama and hectic guessing games, as social media and political circles buzzed with speculation about the new appointee and anti-corruption activists celebrated the news as a major victory in their battle against Governor Mahendran, whose 18 months in office have been plagued by scandal and mounting allegations of corruption.
The dramatic day ended with no final announcement on the next Governor of the Central Bank, with Mahendran’s tenure formally set to end today and news of a ‘stalemate’ on the appointment emerging again by late evening. Tweeting from a meeting to raise awareness on chronic kidney disease in Badulla last morning, President Sirisena said: “I will appoint a new Governor to the Central Bank in the coming hours.”
A shortlist of contenders for the position of Governor emerged from sources within the ruling administration throughout the day. High level sections of the UNP were also strongly advocating the appointment of Former Treasury Secretary Charitha Ratwatte as Governor even as late as last night, sources said. President Sirisena was strongly favouring either former Deputy Governor W.A. Wijewardane or current senior most Deputy Governor at Central Bank Dr. Nandalal Weerasinghe. Top economists Prof. Lalith Samarakoon and Dr. Saman Kelagama were also names that were being tossed about as potential candidates for CBSL Governor, highly placed sources said.
Constitutionally, the President must appoint the Central Bank Governor on the advice of the Finance Minister, but since the Central Bank has been removed from the Finance Ministry purview and functions under the Prime Minister's subjects, it is Premier Wickremesinghe President Sirisena must consult on the appointment.
Be that as it may, a few hours after his tweet promising an appointment, President Sirisena flew back to Colombo and created further buzz by accompanying Prime Minister Ranil Wickremesinghe to the Central Bank for a meeting last evening. The pair spent about an hour at the Central Bank, where they were pictured with Governor Mahendran whose term ends today (30). President Sirisena and Premier Wickremesinghe spoke with staff officials at Central Bank, seeking their opinions on several matters.
Speaking to reporters briefly after their visit, Prime Minister Wickremesinghe quipped: “We came to the Central Bank to discuss the economy.”
“CBSL is a cornerstone of our national economy. Happy to be speaking to the staff of @cbsl this evening with @RW_UNP,” President Sirisena tweeted with accompanying pictures of a packed auditorium.
The visit came hours after the Central Bank Executive Officers Union issued a statement calling for action to prevent a ‘possible anarchic state’ that would arise at the institution from 1 July. The CBSL Executive Officers Union expressed their discontent over the erosion of public confidence and what it called “heightened criticism” of the Central Bank at all levels.
The Executive Officers Union in their statement emphasised that according to the stipulations of the Monetary Law Act, a senior deputy governor can only act in a temporary capacity when a Governor is unable to attend duties and functions as chairman of the Monetary Board and as CEO of the Bank.
In other words, the Union said, if the governor position falls vacant, an acting position cannot be made.
Some civil society organisations were urging the Government to consider an acting Governor appointment until the COPE oversight committee completed its investigation into Mahendran.
Last week Governor Mahendran informed the Monetary Board that he would not be seeking an extension of his term until COPE completed its findings into the treasury bond controversies that have dogged his 18 month tenure. Speculation was rife that the Government would make an acting Governor appointment, but banking experts said there was no provision for such an appointment under the terms of the Monetary Law Act.
The political controversy over the appointment of the Governor of the Central Bank was never addressed publicly by President Sirisena and Prime Minister Wickremesinghe, resulting in wild speculation and extensive guessing games about the new appointment and the question of whether Mahendran would make an exit. The potential candidates for the position ranged from Wijewardane, Dr. Weerasinghe and CBSL Deputy Governor P. Samarasiri to the more preposterous choices of Deputy Ministers Eran Wickramaratne and Dr. Harsha De Silva.