The Central Bank (CB) is yet to take action against illegal operations of a rogue financial institution allegedly handling millions of rupees on a daily basis inside the Economic Trade Centre at Dambulla, officials told the Sunday Times.
The self-styled bank situated inside a Government building at the Centre has been in operation for the past one year depriving the State of large sums of money as taxes while officialdom opts to remain silent, the officials who did not wished to be named said.
“On one occasion a few CB officials made a feeble raid on the institute and took away some documents but the matter ended there. There was no follow up action,” they pointed out.
The persons behind this ‘bank’ are some 120 wholesale traders operating at the Centre and so far dealings with outsiders have been restricted to a few selected individuals, the officials said.
They said the Central Bank was dragging its feet in taking action against this rogue institution which only goes to suggest that certain officials were probably benefiting from it or else there was some degree of political influence.
In addition this ‘bank’ also lends money to a group of persons inside the trade centre and these persons in turn provide large loans to traders on a daily interest basis not exceeding five per cent, the officials added.
“This group is known as the ‘jungle bank’ and the members include police and security forces personnel together with underworld elements”, they said.
Central Bank Non-Bank Financial Institutions Director S. S.Ratnayake said already the ‘bank’ has been given a deadline to close down its operations failing which action would be taken. “On earlier occasions the CB had advised this institution to legalize its operations by adhering to certain rules and regulations laid down for the banking industry.
This would mean that the operators will have to show a minimum of Rs. 200 million as a reserve if it intends to carry out further operations. However as of date they have failed to furnish this required sum,” Mr. Ratnayake added.
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