Saturday, February 20, 2016

‘Catchers’ OF The Former Regime Still At Work

From The Sunday Leader - By Hasitha Ayeshmantha
In response to a critical media report claiming that the Central Bank has tightened the regulations when depositing over Rs. 200,000 to a savings account, Governor of the Central Bank of Sri Lanka Arjuna Mahendran told The Sunday Leader that the above statement was made with regards to a circular that was six years old and currently under review.
The issue came to light with the release of a media report alleging that, in the case of depositing an amount exceeding Rs. 200,000, the Central Bank has issued a mandate for the banks to request their clients to provide the source of their funds.
The particular media report had gone to great lengths to compare and contrast the above scenario to a statement previously made by the Minister of Finance Ravi Karunanayake requesting the Sri Lankan account holders of foreign banks to entrust their savings with local banks. The Minister stated that they will be offered good returns and no questions will be asked.
However, refuting the allegations, CBSL Governor Arjuna Mahendran said that the above media report was compiled in relation to a circular which was six years old, and in the meantime this particular circular is currently under review by the Central Bank.
Further stressing on the matter, the CBSL Governor stated that every bank holds the right to get a client profile when opening an account and that it is within the bank’s general procedure to clarify a few details to create a client profile prior to opening the account.
“I am really disappointed in the way media has addressed this issue, instead of making blind accusations, they should have done proper research with the relevant parties. First of all, the above circular which states the mandate for disclosing the source of the funds, is under review by the Central Bank”, Mahendran said.
Mahendran also said that the Central Bank will certainly increase the amount to a much greater value, especially with the Sri Lankan declining and the value of the dollar climbing high. He added that as the matter is under review at the moment, the new value will be announced within the days to come.
Addressing the media on the issue, Director of the Financial Investigations Division of the Central Bank H Amaratunga said that the Central Bank had not published any such mandate on their gazette statement. He said that the gazette statement in relation to the above scenario was launched recently and that the statement did not carry any clause which subjugated such terms. He also said that the Central Bank will take legal action against the responsible parties.  Also addressing the Issue, Minister of Finance Ravi Karunanayake said that the news report was an absolute lie and that it was promoting a different agenda.
Hitting back at the allegation, the Finance Minister said that the news report clearly reflected the influence of the former Governor of Central Bank Ajith Nivard Kabraal. He alleged that ‘catchers’ of the regime are making desperate attempts to undermine the country’s financial sector.
He also said that Sri Lankan banks have received US$450 million in deposits from Sri Lankans and foreigners holding Swiss Bank accounts, after the Government invited them to re-route their money here. Finance Minister Karunanayake said that accountholders at Swiss banks were invited to deposit their money through the banking system in Sri Lanka, promising a return of higher interest rates.
The minister was quoted saying that further steps would be taken to ensure those deposits are legally safe in future. He has said there are some foreigners among the depositors including two Saudis and two from Qatar.
Earlier in last October, Minister Ravi Karunanayake said that Sri Lankans could deposit their savings in local banks which offer rates several times more than those offered in international money markets.“Sri Lankans could be holding about $6 billion to $8 billion in Swiss accounts. We are requesting them to bring that money and deposit in any bank here. No questions will be asked,” he added.
The issue was raised after a number of Swiss banks had reportedly requested Sri Lankan depositors to withdraw their assets and close their accounts, as a part of a restructuring move.
Minister Karunanayake said that confidence in the country had been restored following the change of regime and with the new government’s healthy relations with both India and China playing a clear role in the country’s economic framework; therefore he invited all foreign account-bearing Sri Lankans to invest their assets here in
Sri Lanka.

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