The Central Bank, the sole regulator of banks and financial institutions, is in the dark relating to a decision taken to restructure six state banks as indicated in a list issued by State Owned Enterprise Restructuring Unit (SRU) to the media, Central Bank (CB) Governor Nandalal Weerasighe proclaimed Answering a question raised by a journalist [...]

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Central Bank in the dark on restructuring state banks

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The Central Bank, the sole regulator of banks and financial institutions, is in the dark relating to a decision taken to restructure six state banks as indicated in a list issued by State Owned Enterprise Restructuring Unit (SRU) to the media, Central Bank (CB) Governor Nandalal Weerasighe proclaimed

Answering a question raised by a journalist at the CB monetary policy review media conference on Thursday, he said that state banks function under the purview of the Finance Ministry with the CB as the regulator.

The monetary and fiscal authorities have not been informed about any decision to divest state banks, he said adding that the SRU has not been authorised to restructure financial institutions and therefore it’s involvement in such activities is improbable.

According to proper procedure the Banking Act will have to be amended to introduce reforms in state banking system, he said adding that the CB is totally unaware of such moves.

However he disclosed that the CB has released US$ 225 million to Bank of Ceylon (BOC) for the purpose of restructuring Sri Lanka Development Bonds (SLDB) as it was difficult in raising the required amount in dollars from the market although the CB has given the amount in rupees.

Sri Lanka is still confident on the completion of International Monetary Fund’s (IMF) staff review and the executive board approval to be completed by October – November as the government is fully committed to implement economic reforms along with the debt restructuring process, Dr. Weerasinghe said.

 

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