The Governor of the Central Bank of Sri Lanka (CBSL) Ajith Nivard Cabraal has issued a special circular prohibiting banks from providing loans to the Ceylon Petroleum Corporation (CPC), Lankadeepa Newspaper reported.
According to Lankadeepa, the CBSL Governor has warned the Government that the state’s banking system will not be able to operate in the future and may collapse due to continuing to provide loans to the CPC.
Cabraal has further informed the Government that he will not take responsibility if the state’s banking system collapses due to this reason.
Meanwhile, officials from the state banks have revealed that various parties have been forcing the banks to continue providing loans to the CPC.
“The era in which banks followed such demands has ended. We cannot be forced by such pressure anymore. Banks cannot provide anymore loans to the CPC. If this continues, then the state’s banking system will definitely collapse,” a CBSL official told Lankadeepa.
Commenting on the matter, Minister of Energy Udaya Gammanpila has revealed that the CPC’s current loans have reached the highest limitation.
He said this will lead to a fuel shortage and the only solution to the issue is to remove the tax imposed on fuel.
The Minister said a request has been made from the Government to remove the tax imposed on fuel, adding that the authorities are yet to respond to the request. (NewsWire)