SJB MP Eran Wickramaratne addressing the media at his political office at Kirullapone yesterday said that Central Banks are always independence of the governments and they are not a department of the Government.
Their primary responsibilities are looking at the stability of financial system and secondly making sure the inflation is under control. Therefore, the CBSL needs to have the independence to ensure these policies.
Former Governor of the Central Bank Ajith Nivard Cabraal is a politician more over a minister in the present government. It is very clear if you are a politician or a minister you cannot be appointed to become the Governor of the Central Bank. Usually a very experienced official from the bank can aspire to be appointed. If an out sider, he should have the economic and monitory economic backgrounds. Some might hide behind and think by resigning from the ministerial post and become the governor of the CBSL. It cannot be done as there is a conflict of interest. That is impossible to do. There has to be a cooling of period before such an appointment is made.
There were in the Presidential Commission of Inquiry on the Bond Scam for a requirement to have a forensic audit on the transactions that took place between January 2002 and February 28, 2015. There are five Forensic report done by reputed institutes such as PDO and KPMG. These reports talk about the conflict of interest where many members of Mr. Cabraal’s family were in various financial institutions during the time Mr. Cabraal was the Governor. It reveals of a potential conflict of interest noted between July 2006 to Jan 2015. Dr. W.A. Wijewardene, a retired Deputy Governor has confirmed there has been a conflict of interest and also Mrs Mano Ramanathan has revealed to the Forensic Committee that no declaration was made to the Monetary Board about the conflict of interest as required by the law.
Under this context Mr Cabraal is very, very unsuitable to be the Governor of the CBSL before the government investigated the revelations in the Forensic Audit Reports about the involvements of Mr. Cabraal I as the Minister of State for Finance could not be able to follow it up as these reports came out at the end of 2019. But this government has tried to sweep these reports under the carpet, that is not possible as these are forensic audits that came through a Presidential Commission and they must be investigated.
In addition to that he said that anyone can read from the internet on 18 February 2021, a report talks about a political donor was sentenced to imprisonment for 12 years in the USA for the crime committed by him for lobbying and campaign contribution crime, The GOSL had hired this person called Zuberi in 2014 for an image building project of Sri Lanka in USA and agreed to pay him USD 8.5 million. We have paid 6.5 M Dollars to Zuberi but nothing came out from him.
Mr. Wickramaratne asked as to who paid this money. Though it has to be approved by the Cabinet or by the Government, there was no such approval, but has been paid by the Central Bank . Who in the CBSL was responsible for this .Did the Monetary Bord knew about it. The then Governor of the Central Bank is responsible, these must be investigated . How can a government even consider appointing, a person like that again as the governor of the central bank. He emphasized that a country is more important than an individual . Commercial Banks international agencies, Rating agencies will be concerned and Wikremarathne expressed the confidence that the Govt makes the right decision.
In the meantime Mr Wickramaratne also said that the Govt has imposed a 100 percent cash margin when opening letters of credit on over 600 items including Mobile Phones and Computers describing them as non – essential goods. But the SJB Parliamentarian Mr. Eran Wickramaratne addressing the media at his political office, at Kirullapone yesterday said when he inquired from two banks they said that even with 100 % margin it is impossible to open an LC because they don’t have the dollars. The Central Bank is not issuing dollars to the commercial banks which is essential to pay for an LC.
This restriction of 100 % margin will again help the cronies who are major importers to monopolize the market . It is not only they can afford to keep the required margin from their saving without additional cost of finance, they might even have the dollars to meet the needs. Normally there is no interest accrued by the importers on the deposits made for an LC and as a result the SMEs in the country will find extremely difficult as they don’t have the savings to keep the required 100 % margin and probably, they may be thrown out of this business. As a result of this new regulation by the government to save its face from the shortage for dollars, will put up the prices of these goods.
The list which could be considered as a virtual ban includes Mobile phones, computers among over 600 items declared as non-essential goods by the government. Ours is the only country where students have most number of “Home -days than the School days” as the government is keeping our kids at homes. due to pandemic and amidst this, Mobile phones and the computers have become essential goods to learn online.
“The critical matter is the CBSL will not sell dollars to banks to pay when the LC becomes due . This is the big problem faced by the commercial banks. There is a dollar shortage in the country, what is the government doing about it. What kind of policies this government is pursuing? Are they taking back the people to the dark eras of ques and shortages So this is an absolute nonsense” declared Mr. Wickramaratne.
Mr Wickramaratne emphasized that the real issue is dollar shortage and we need to address that primary issue as a country, if we are to come out of this problem.