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Opposition, senior bankers cry foul over prospects of privatisation
The draft People’s Bank (PB) (Amendment) Bill risks leading to indirect privatisation of the State Bank, unless it is further amended, Opposition lawmakers and senior bankers warned this week.
At a media briefing held in Colombo, Mahajana Eksath Peramuna Leader Dinesh Gunawardena insisted that the Bill has been brought by the Government with the intention of tapping into the Bank’s funds.
He noted that the Bill aims to remove the Bank from under the control of the Central Bank Monetary Board (CBMB), by allowing the Bank to issue Debentures without Board approval. “This is all being done under the pretext of increasing the Bank’s capital,” he added.
Rusiripala Tennakoon, a former Chairman of the Bank of Ceylon and current member of the Colombo Municipal Council, said the present PB Act allows the Bank to issue Debentures, subject to 3 conditions, namely that they be approved by the CBMB, that the modus operandi be decided at Ministry level, and the Debentures be issued under Government guarantee. “With these being removed by the new Act, it will allow banks to surreptitiously convert Debentures into Shares. They must bring in an amendment to the amendment, to prevent that,” he insisted.
“In an event where the PB decides to issue convertible Debentures, which would be converted into Stock, after a specified period, it will pave an indirect path towards privatisation, as it would mean that Shareholders will be able to hold Shares in the State Bank,” Mr Tennakoon stressed.
Meanwhile, this week, in compliance to a request made by Opposition Leader Mahinda Rajapaksa, the Government postponed the debate on the PB (Amendment) Bill, which was, originally, to be debated on September 4.
Accordingly, the Committee stage debate and a final vote on the Bill will now be held on September 19.