Monday, April 22, 2024
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CBSL pathetic performance: perform or perish?

By: Adolf

The Central Bank came under heavy fire from the Members of Parliament yesterday. During the Party Leaders’ meeting convened on the matter, MPs voiced their discontent over the move to increase salaries by 70% without government approval , labelling it as a violation of the law. Several MPs argued that the Central Bank lacked the legal authority to unilaterally raise its staff salaries without prior approval from Parliament, adding to that this decision has resulted in an additional monthly expenditure of Rs. 232 million to the CbSL.

Moral integrity

The MPs also criticized the moral integrity of the Central Bank, highlighting the contradiction of increasing its employees’ salaries, whilst introducing policies that hike taxes such as PAYE and VAT for other segments of the workforce. Central Bank Governor Dr. Nandalal Weerasinghe defended the salary hikes, citing provisions within the Central Bank Act that empower the institution to determine and adjust salaries as necessary. He also underscored that these provisions were not only present in previous legislation, but also in the current law. This argument was shot down by the MPs. Separately during the Parliamentary session yesterday, Dr. Charitha Herath raised concerns about the legitimacy of the purported three-year collective agreement of the Central Bank, pointing out that it has not been approved by the Labour Ministry and considering it a mere document. MP Dayasiri Jayasekara criticised the Central Bank officials, accusing them of serving their own interests while penalising others with their powers. He highlighted the disparity in interest rates, noting that Central Bank employees enjoy rates as low as 1% whilst the general public faces rates as high as 20.5%.Adding to the heated discussion, MP Suresh Raghavan issued a stark warning, suggesting that if there were to be another wave of public unrest akin to the Aragalaya movement, bureaucrats’ houses would be targeted instead of politicians’.The decision to implement steep salary hikes for CBSL staff sparked concerns amid debates over the autonomy of the Central Bank and the implications of recent legislative changes. The IMF must be held accountable for this.

CBSL Poor Performance

The CBSL is largely responsible for the economic mayhem. For the following four Reasons;

  1. Borrowing USD from international markets at commercial rates between 2015-2020
  2. Declaring bankruptcy without parliamentary approval for 65$ Million.
  3. Jacking interest rates to 30% without any concern for the SMEs, public and Corporate sector . Making over 25% of the SMEs bankrupt and also pushing government borrowing up by 16% by issuing long term bonds at 30%
  4. Allowing local bond holders to making a killing ; classic cases first capital and Capital Alliance

A commission must be appointed to review these decisions and the impact these decisions had on livelihood of people. if found guilty their civic rights should be removed or fined. The current governing body has one banker who retired over 25 years ago . Knows nothing on technology. There is an uncle and nephew on the governing board . How much is the governing board members paid . Over 3 million each annually?

Conclusion

The CBSL by increasing salaries by 70% arbitrarily has failed the nation. It is a shameful to say the least whilst they heap taxes on the general public. Central Bank ‘s independence should therefore be limited only to make  decisions on behalf of the country without restrictions and outside influences to manage price levels, but not for their personal benefit.  If the law is not clear on this,  the Parliament has the responsibility to amend it. The Central Bank must be held accountable for their actions . If the Governor and the Governing Council had any decency they would have all resigned yesterday. The perks are too good for them to leave the Central Bank.

The governing body

a) Dr. Nandalal Weerasinghe, Governor of the Central Bank of Sri Lanka, as the Chairman,
b) Mr. Sanjeeva Jayawardena, President’s Counsel, who was previously, a member of the Monetary Board as well,
c) Mr. Nihal Fonseka, who also was previously, a member of the Monetary Board,
d) Dr. Ravi Ratnayake,
e) Mr. Anushka Wijesingha.
F) Manil Jayasinghe
G) Amerasekara Rajiv

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