Public pressure mounts against the Divineguma Bank and NSB merger
Massive pressure from the public, government, opposition politicians and the subject minister is mounting against the proposed merger between the Divineguma Bank which has a deposit portfolio of around Rs. 59 billion and the National Savings Bank (NSB), the country’s premier savings bank. The Treasury has made the 2016 budget proposal to merge the two banks with majority savings deposits of the poor people of Sri Lanka as the Divineguma Bank has no capacity to manage a fund of this scale, a senior official said.
“It is essential to protect this fund given that the stakeholders are some of the most vulnerable in our society,” said Finance Minister Ravi Karunanayake in recommending the merger of the Divinaguma Bank with the National Savings Bank for the protection of the Rs. 59 billion fund ensuring professional management.Minister of Social Empowerment and Welfare S.B Dissanayake has stated that he is not in favour of transferring the Divineguma funds to (NSB) and that he will not sanction money for it.
He noted that he will never allow the transferring of samurdhi recipients’ money to NSB although its deposits are guaranteed by the Central Bank.
Minister Dissanayake said that the government should withdraw this budget proposal even after the committee stage budget debate, as he will bring this matter to the notice of Prime Minister Ranil Wickremasinghe. But the senior government official said that the Divineguma banking structure was a gamble using public money and the minister in charge was all powerful in managing the finances.
He pointed out that the minister in charge would recommend the registration and other matters of the Divineguma Bank and it would have to comply with the minister’s orders or directions.Divineguma Bank has doubled the loan amounts payable and now an individual could obtain up to a maximum of Rs.1 million. The bank will provide loans for group activities, marketing purposes, construction of stores, purchase of mobile sales outlet vehicles, community development programmes as well as for construction of houses. Loan facilities are now being provided through 1073 Divineguma Community Bank branches throughout the island to improve living standards of the rural masses.
This bank opens the door for the poor to obtain financial assistance without much resistance as it is very flexible in lending to samurdhi recipients, a top office bearer of Samurdhi Development Workers Union, said. Around 20,000 Divineguma workers will be affected if the government decides to go ahead with this budget proposal, he said adding that those workers will join hands with around 1.4 million samurdhi recipients in holding countrywide protest campaigns till the withdrawal of the budget proposal.The government should give an assurance that it will protect the job security of Divineguma workers serving in 1073 Divineguma Community Bank Branches countrywide.
He noted that they would not allow to amalgamate the funds in the Divineguma Fund with the NSB.