Central Bank suspends PABC primary dealership over bond scam

Sri Lanka’s Central Bank has suspended the primary dealership of Pan Asia Banking Corporation PLC (PABC) for six months following allegations pertaining to its role in the infamous bond scam.
The decision which is effective from August 15 is based on the findings of an investigation carried out by the Central Bank (CB) related to PABC’s transactions with Perpetual Treasuries Ltd in the government securities market, the banking regulator said in an announcement on Tuesday.
During the current inquiry by a Presidential-appointed Commission, PABC’s role in dealings with suspect trader Perpetual Treasuries in the bond scam was exposed in evidence. “The Central Bank also wishes to inform the general public that the above regulatory action does not in any way affect PABC’s ability to carry on banking activities set out in Schedule II of the Banking Act, No. 30 of 1988 as a Licensed Commercial Bank. Accordingly, PABC may continue to deal in government securities to the extent permitted under schedule II of the Banking Act. Action will also be taken by the Central Bank to safeguard the interests of the customers and counterparties of PABC in the government securities market, in an orderly manner,” the CB said.
It said that while this regulatory action restricts PABC’s access to the primary auctions for government securities, it doesn’t affect any of the other activities/services of PABC. (DEC)