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Parate rights for all specialised banks
In the wake of the collapse of Pramuka Bank, the Finance Ministry is preparing a new law granting parate execution rights to all specialised banks in an effort to make it easier for them recover bad loans.

Central Bank sources said that a special amendment to the Recovery of Loans by Banks Act will be presented to Parliament shortly. Thirteen specialised banks will benefit from this privilege, which Pramuka had been fighting for prior to its closure.
In the latest developments following the Central Bank Monetary Board’s decision to liquidate Pramuka Savings and Development Bank (PSDB), Pramuka depositors met Central Bank deputy governor P.M Nagahawatte last Tuesday to discuss a possible re-opening of the bank.

Pramuka Depositors Association president Ranjith Arambawala said that the Central Bank was willing to consider a proposal made by the depositors, addressing the key issues, which were highlighted by the Monetary Board as reasons for its decision.
Arambawala said that the inability of Pramuka’s Board to give the Central Bank a commitment of Rs. 600 million as a safeguard, in case current individual depositors were to withdraw their deposits, was a problem which could have been averted had they been informed of such an issue.

Arambawela said that he had informed the Central Bank that if the bank was to be re-opened, all individual depositors would not withdraw their money for a minimum period of two years, and would also not expect interest from the bank until it was able to make such payments.

However, the Central Bank had wanted similar assurances from the institutional depositors whose total deposits amounted to Rs 700 million. Aramabawala said that there was a positive response from most institutions, pledging their support towards the cause.

However, senior Central Bank officials who did not wish to be named said that it was unlikely that the Monetary Board would change a decision that had already been made after much deliberation.

They said that Central Bank decisions were based on the provisions of the Banking Act, which did not permit it to accept written assurances by depositors. Arambawala in a proposal submitted last Friday to the Central Bank had stated that the Managing Director of Pramuka A.H.A.Mendis had assured him that the Board was willing to act on any recommendations made by the Central Bank for the re-opening of the bank, and was even willing to resign.

The proposal also states that two senior bank officials from leading private sector banks had shown keen interest in taking over Pramuka’s management. Some of the other recommendations made in the proposal are for the creation of a special loan recovery unit with parate rights to recover all bad loans.

Hotel industry buoyant about tourist influx
By Rajika Chelvaratnam
The revival in tourism has not been as big as anticipated but the industry is happy with the influx of tourists this year, citing the peace process as the main reason, with many hotels reporting healthy occupancy levels. Praveen Nair, general manager of Taj Samudra, said that the tourist industry was gaining momentum.” No one can expect miracles,” he said, “but it is going extremely well.”

The hotel has occupancy of 70 percent and they had increased their prices by about 20 percent in comparison to the last six months. He was “positive and buoyant” about the situation and believes there is hope as long as the peace process lasts.
Sri Lanka is “strategically located” at the “crossroads to the East and West” and if the situation continues the country can occupy a position like Singapore or Dubai.

Jayantissa Kehelpannala, managing director of Keells Hotels, which owns a strings of hotels in Bentota, Wattala, Habarana, Kandy and Beruwala, said that even in comparison to 2000 there was a marginal increase in the number of arrivals.
Kehelpannala said that their hotels have an average occupancy rate of about 80 percent and that their prices have gone up.

“We need to have one more good season like this,” in order to further enhance their prices, he said. Certain other competing destinations have their own problems but the present peace process is the biggest reason for the growth in tourist influx, added Kehelpannala.

Dushyanth Wijayasingha of Asia Capital said that the number of tourist arrivals had tripled above last year’s levels and were also well above the year 2000 figures.
He cited the present peace process as well as problems facing other popular tourist destinations as some of the main reasons for this increase.

Though the most recent figures have not been received yet the occupancy levels in hotels this year have gone up by 25 percent as at September but there has not been much of an increase in prices, he said.

“Sri Lanka is a price-sensitive market” that caters to the middle segment of society, he said, adding that there was a need for maintaining a price competitive market.
Claude Scheffer, general manager of Trans Asia, said tourist arrivals were about 20 percent higher than in 2000 which was a good year for the industry.

Apart from the peace process itself, Scheffer attributed the recovery to the promotional efforts of the Tourist Board and the way Colombo has been dressed up.
“Tourists have not seen Colombo like this,” he said.

Though the hotel’s occupancy rate this month is lower than in the same period last year, he said that it proved promising for the next three months. But they would not be revising their prices till the next fiscal year.

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