May 05, Colombo (LNW): Sri Lanka samurdhi banking system is to be regularised making it difficult for corrupt officials and politicians to pilfer money from the compulsory savings of poorer recipients, finance ministry sources said.
It will be upgraded to guarantee transparency and independence by implementing a credible and a practical empowerment plan to bring it under the purview of the Central Bank
The samurdhi bank has assets worth Rs.400 billion including the deposits of samurdhi recipients (compulsory savings) which were invested in banks and government securities
There are currently 1,050 samurdhi “banks” (branches) in Sri Lanka but they are not formally recognised as banks as they do not fall under the preview of the Central Bank.
These informal banks were used exclusively as distribution points for the samurdhi monthly cash transfers.
Many incidents of stealing money from these banks with the connivance of its managers and samurdhi development officers under the guise of poor relief programs have been reported in the recent past.
Details of all these fraudulent activities including bank robberies recorded in public domain and some inquiries are still pending.
The lack of financial inclusion of poorest of the poor has deprived most of them even obtaining a loan or any other financial facility from a samurdhi bank.
Considering all these factors the Government has decided to regulate the samurdhi banking system as a microfinance banking system of the Central Bank to provide the “Aswesuma” welfare benefit for the people
President Ranil Wickremesinghe has also directed the officials to look into the possibility of developing the samurdhi bank further into a state rural bank as it cannot be continued as an informal bank.
The Committee on Public Accounts has instructed the Samurdhi Development Department to provide details of the amount of money in the seven funds currently under the care of the Department and the services provided by those funds
Samurdhi Bank, which is under the purview of the Samurdhi Department, is not subject to state audit, and the COPA and the Office of the Auditor General have agreed that it should be audited although It has its internal auditing system.
Up to now, this banking system has no facility for cash transfer to the beneficiary accounts.
Therefore Government is not in a position to utilise the samurdhi banking system for cash transfers for the poor and the vulnerable, a senior official of the finance ministry said.
He said that action would be taken to make use of billions of rupees of samurdhi funds in a productive manner to provide immediate relief for vulnerable community.
So the immediate priority is to be given to upgrade it to a link system where the money can be transferred to the beneficiary’s account without third party involvement.
