Colombo (LNW): President Ranil Wickremesinghe today (20) called on Patricia Scotland, Commonwealth Secretary General, during his official visit to the United Kingdom.
The two met at the Marlborough House – the headquarters of the Commonwealth of Nations and the seat of the Commonwealth Secretariat – in Westminster, London.
Their discussion focused on the digitisation of programmes, measures to broaden the Commonwealth’s partnerships, and the Commonwealth’s role in climate response.
ECONOMYNEXT – Sri Lanka’s commercial banks have called an effective insolvency regime and discussions through the central bank before changing any existing debt recovery laws, as bad loans in the banking system go up.
Sri Lanka Banks’ Association (SLBA) representing all commercial banks said it is urging “policymakers to engage with commercial banks via the Central Bank of Sri Lanka (CBSL) to ensure a comprehensive and well-coordinated approach to alleviating the stress felt by the industrialists in loan default.”
Some troubled businesses with defaulted loans are lobbying to change debt recovery laws, called ‘parate execution’ where collateral is sold.
Recovery efforts (parate executions) have gone up in the first quarter of 2023 after over two trillion rupees worth moratoriums and loans restructures have taken place over the past few years, the SLBA said.
The banks sounded a warning on current bank capital and liquidity numbers.
“Complacency that capital and liquidity measures currently exceed regulatory minimum criteria is a false comfort,” the SLBA said.
“This has raised the level of non-performing debts and has subdued capital formation and ability to provide credit to the economy.”
Sri Lanka’s bad loans is going up due to currency crisis triggered by liquidity injected to mis-target rates on top of a Coronavirus crisis.
Some countries which were hit by currency crises after mis-targeted rates have set up asset management companies to resolve bad debt.
The full statement is reproduced below:
SLBA calls for government engagement to facilitate debt recovery process
The Sri Lanka Banks Association (SLBA) has urged policymakers to engage with commercial banks via the Central Bank of Sri Lanka (CBSL) to ensure a comprehensive and well-coordinated approach to alleviating the stress felt by the industrialists in loan default, following the COVID-19 pandemic and the economic crisis.
The Association, which represents all Licensed Banks in Sri Lanka, said in a statement that the unusually high number of debt recovery (parate execution) actions within the first four months of 2023 is due to an accumulation of legal actions that were suspended as per the general moratorium granted by CBSL since COVID in 1Q 2020 (3 years) and to the tourism industry since the April 2019 attacks, where banks had to desist from debt recovery action/‘parate execution.’
In this context, the SLBA said a worthy initiative for parliamentary attention would be to improve management of troubled debt / borrowers (SMEs in particular) to develop an effective insolvency regime, to save distressed firms, when possible, through robust restructuring frameworks or alternatively, to facilitate the exit of non-viable firms as efficiently as possible in order to reallocate productive assets.
“Of approximately Rs 10.8 trillion in gross loans extended by the banking sector as at March 31, 2023, relief by way of moratoriums, restructurings and other forms of payment relief offered over the last three years amounts to well over Rs 2 trillion,” the Association noted. “As per estimates, this has benefitted well over one million customers across both the retail and corporate segments in one form or another. This also includes approximately Rs 1.3 trillion in facilities with deemed elevated levels of risk, and we have not hit the bottom yet.”
“SLBA’s main aim is to help develop and maintain stability of the banking system within the Central Bank (CBSL) regulatory framework. Protecting the safety of customer deposits and investor/shareholder capital, is crucial to achieving this goal,” the statement said.
“Certain businesses and individuals who have borrowed from banks are unable to repay their debts. Debt repayment default has many origins, including disruption of the economy due to internal and external causes such as the global COVId-19 pandemic.”
“A segment of the borrowers in default have engaged lobbyists in the hope of initiating legislative intervention on a preferential basis without evaluation of the macro-economic impacts on the nation,” the SLBA noted, cautioning that “preserving the status quo of the failed borrowers at the expense of depositors who lent them the money is not sustainable. This approach threatens the stability of the banking sector and the entire economy that banks support.”
“It is therefore hoped that the lobbyists who appear to have been engaged by the troubled borrowers / businessmen will encourage a Central Bank led engagement with the commercial banks to ensure that the decision-making process is comprehensive and well-coordinated in alleviating the stress felt by the industrialists in default,” the Association statement said.
The SLBA noted that to ease the impacts of the April 2019 terror attacks, March 2020 Covid-19 pandemic, and the 2021 economic crisis that continues to stress the people who live in Sri Lanka, several debt repayment moratoriums (postponements) have been granted and renewed by banks and funded (mainly) from their own resources.
“This has raised the level of non-performing debts and has subdued capital formation and ability to provide credit to the economy. Complacency that capital and liquidity measures currently exceed regulatory minimum criteria is a false comfort,” the statement cautioned.
“When credit quality continues to deteriorate year on year and deposits continue to provide the main source of funding, the banking sector has no space to manage a suspension or delay of debt recovery.”
The SLBA pointed out that “Parate execution has been available to the state banks under their respective instruments of incorporation.
This option to mitigate loan default losses by facilitating efficient debt recovery and reducing cost of financial intermediation was thereafter extended to all of the Licensed Commercial Banks by the ‘Recovery of Loans by Banks (Special Provisions) Act No 04 of 1990.
Colombo (LNW): A total of 20 persons were killed and 13 persons were injured due to gun violence this year, revealed Police.
According to the Police Spokesperson, 34 shooting incidents have been reported during the first six months of 2023, and a total of 60 shooting incidents had been reported in this year.
These events include the involvement of organised criminals and other reasons, he added.
Meanwhile, 559 murders were reported in the previous year, and the Police were able to resolve 493 of them and apprehend the suspects, the Police Spokesperson noted.
This year, a total of 225 murders have been reported, and 34 of them are related to drug smuggling and organised crimes, he added. 223 of the reported incidents have been resolved and suspects and their associates have been arrested, he asserted.
The British High Commission in Colombo yesterday (19) announced that Sri Lanka was among 65 countries that would greatly benefit from one of the most generous preferential trading schemes in the world. The UK’s Developing Countries Trading Scheme (DCTS) that provides tariff reductions and simpler terms of trade got underway on June 19. The scheme was announced last year, and legislation has now been finalised to bring it into force.
A BHC statement quoted British High Commissioner to Sri Lanka Sarah Hulton OBE as having said: “The UK is Sri Lanka’s second largest export market and the DCTS demonstrates the UK’s continued interest in strengthening this trade relationship.
We hope that Sri Lankan exporters will broaden their opportunities with the UK by making use of the wider number of products for which tariffs have been removed.
The DCTS is a tangible example of the UK’s commitment to growing free and fair trade with countries like Sri Lanka, boosting economies, and supporting jobs.”
Speaking at the launch of the scheme, UK Minister for International Trade Nigel Huddleston said:
“This scheme will create opportunities for businesses around the world, supporting livelihoods, creating jobs and diversifying local and international supply chains.”
The BHC statement: “The DCTS allows Sri Lanka to now trade with the UK tariff-free on 92% of goods, leading to increased competitiveness of Sri Lankan products in the UK market. Sri Lanka is well positioned to supply the UK due to increasing demand for sustainable, fair-trade, and healthier products. With more flexible rules of origin it is easier for least developed countries to trade with Sri Lanka without losing tariff-free status, increasing the potential for supply chain development.
To support business take-up of the DCTS, the UK Trade Partnerships programme (UKTP) has expanded and now covers Sri Lanka. UKTP provides technical assistance to almost-ready-to-export small and medium-sized enterprises (SMEs) and is delivered by the International Trade Centre (ITC). The programme will primarily provide trade promotion technical assistance to a selected number of Sri Lankan SMEs, preparing them to participate successfully in international trade fairs. This will improve the visibility of Sri Lankan producers, equip exporters with the necessary tools and knowledge, and facilitate their entry into new markets.
With a limited number of slots available, ITC will conduct a selection process for Sri Lankan SMEs who will receive support via the UK Trade Partnerships programme across identified sectors. This will be announced shortly.
The DCTS replaces the UK GSP and retains powers to suspend a country on the grounds of human rights and labour rights violations, and broadens these powers to include violations in relation to anti-corruption, climate change and environment conventions. It grounds all suspension decisions in the principles and obligations of international conventions.”
Colombo (LNW): Foreign Minister Mohammad Ali Sabry speaking to a political programme aired on Hiru TV said he continues to bear responsibility as the former Finance Minister for the sovereign ‘debt default’ announced last April.
Q: Do you still bear the responsibility for us announcing then that the debt won’t be repaid?
“Definitely. That was a collective decision we had made. The suggestion had primarily come from the Monetary Board. The Central Bank Governor is the Head of the Monetary Board. Then, the Central Bank Governor and the Treasury Secretary briefed me on the matter. After it was suggested to me – we had a specialist team comprised of Mr. Coomaraswamy, Mr. Shantha Devarajan and Mrs. Shamini Coorey – we understood that this was the best decision that can be taken as we reviewed the options we had and based on information I received.”
Q: Do you believe that decision to be still accurate?
“Definitely. That was what drove the country to make a comeback and gain economic recovery.”
Q: So you’re saying that you still stand by that decision?
Political insiders say President Ranil Wickremasinghe has warned the SLPP leadership that he will be compelled to dissolve Parliament if the SLPP MPs do not give their cooperation to implement the Govt’s planned activities.
Police spokesman says the 1,227 kg of cannabis seized from Embilipitiya where 3 suspects were arrested, is possibly the biggest haul of cannabis to be seized at a single instance in Sri Lanka.
LKR appreciates again against the USD at a few commercial banks in Sri Lanka: CB announces LKR selling rate as Rs.315.13 per USD: analysts say the LKR’s wildly fluctuating behaviour is providing lucrative opportunities to “hot-money” investors who are making huge profits while the Govt is incurring the corresponding loss.
Reuters News says the World Bank is likely to approve USD 700 mn in budgetary & welfare support for SL on June 28: if received, it will be the biggest funding tranche for the crisis-hit nation since the IMF deal in March: analysts point out that no other funds from bi-lateral or commercial creditors seem to be forthcoming.
Energy Minister Kanchana Wijesekara says the ruling SLPP is happy to continue to support President Ranil Wickremesinghe despite differences: explains that jeopordising his administration would mean a return to queues: CB data shows that since 1st April 2022, the country has suffered massive economic contractions of 8.4%, 11.8% and 12.4% in 2Q, 3Q, and 4Q of 2022, and a contraction of 11.5% in 1Q of 2023.
SJB MP Harshana Rajakaruna says calling regular elections couldn’t be the prerogative of the President under any circumstances: also says the SLPP should be ashamed of its response to President Ranil Wickremesinghe putting off the LG polls indefinitely, as it is the still the party with the largest group in Parliament.
Member of the Presidential Advisory Group on Debt Restructuring Dr. Sharmini Coorey says Sri Lanka should renegotiate past tax holidays given to corporates in order to get a much higher tax revenue while VAT exemptions too should also be removed: insists that when it comes to taxes, the rich Sri Lankans are not paying sufficient taxes and too many tax breaks have been given to corporates.
Sri Lanka Banks Association (SLBA) urge policymakers to engage with commercial banks via the Central Bank to ensure a comprehensive and well-coordinated approach to alleviate the stress felt by the industrialists in loan default following the COVID-19 pandemic and the economic crisis.
Cricketing minnows Oman, coached by former Sri Lanka captain Duleep Mendis, pull off a massive upset by beating Ireland in their opening World Cup qualifier in Zimbabwe: it is Oman’s 1st ever victory over a Test nation in an ODI: Ireland – 281/7 wickets (50): Oman 282/5 (49.1).
Sri Lanka beat UAE by 175 runs in its 1st ICC Cricket World Cup 2023 Qualifier: Wanindu Hasaranga takes a career best 6/24 runs: Sri Lanka – 355/6 (50) Kusal Mendis – 78, Sadeera Samarawickrama – 73: UAE – 180 all out (39): Hasaranga – 24/6.
The Guardian: A British adventurer is among those aboard a submarine which has gone missing near the wreckage of the Titanic.
Hamish Harding, 58, is understood to be aboard the five-person OceanGate Expeditions vessel, which was reported overdue on Sunday evening about 435 miles south of St John’s, Newfoundland.
Harding is the chair of the private plane firm Action Aviation. His wife is called Linda, and he has two sons named Rory and Giles, as well as a stepdaughter named Lauren and a stepson, Brian Szasz.
As a student, he left Cambridge with a degree in natural sciences and chemical engineering.
Harding is an aviator, holding an airline transport pilot’s licence and business jet type ratings, including the Gulfstream G650. He is also a skydiver, was inducted into the Living Legends of Aviation in 2022, and is a trustee of the Explorers Club.
He also previously worked with the Antarctic VIP tourism company White Desert to introduce the first regular business jet service to Antarctica.
Harding has made many trips to the south pole and, in 2016, accompanied Buzz Aldrin, who became the oldest person to reach the south pole at 86. He also went into space last year with Jeff Bezos’ Blue Origin company.
Harding is the current holder of three Guinness world records, relating to his work as an adventurer. In 2019, he was commended for the fastest circumnavigation of the Earth via both poles.
As part of a crew of eight astronauts and aviators in a Qatar executive Gulfstream G650ER ultra-long-range business jet, Harding led the mission to mark the 50th anniversary of the Apollo 11 moon landing by Neil Armstrong and Buzz Aldrin. He achieved the feat in 46 hours, 40 minutes and 22 seconds.
In 2021, he achieved the greatest distance covered at full ocean depth and the greatest duration spent at full ocean depth.
Alongside Victor Vescovo, Harding dove in a two-man submarine to the lowest point in the world’s oceans, the deepest point of the Mariana Trench, the Challenger Deep – a depth of about 36,000 ft.
The 13-hour underwater mission was also the longest duration spent at full ocean depth (four hours and 15 minutes) and the longest distance traversed at full ocean depth (4.6 km).
On social media at the weekend, Harding said he was “proud to finally announce” that he would be aboard the mission to the wreck of the Titanic – but added that due to the “worst winter in Newfoundland in 40 years, this mission is likely to be the first and only manned mission to the Titanic in 2023”.
He added: “A weather window has just opened up and we are going to attempt a dive tomorrow.”
PMD: During a press conference held yesterday (19) at the Presidential Media Centre, Minister of State for Finance Mr Shehan Semasinghe addressed the issue of false information being disseminated by various parties in the country regarding the domestic debt optimization program.
He emphasized that the government has not made a final decision on this matter. Minister Semasinghe further emphasized the sensitivity surrounding the optimization of domestic debt and assured that the government is approaching this issue with utmost responsibility.
Minister Shehan Semasinghe reaffirmed the government’s dedication to achieving improved optimization in order to uphold the stability of Sri Lanka’s banking and financial system. His remarks were made in line with the conference’s theme, ‘Collective path to a stable country’.
Expressing his views, Minister Shehan Semasinghe further said;
“No final decision has been made yet on the domestic debt optimization program. However, as a government, we always approach sensitive issues responsibly. President Ranil Wickremesinghe also addressed the matter of domestic debt optimization in Parliament. The Central Bank and the Ministry of Finance have provided clarifications on their stance. Our focus is on finding solutions for optimizing the banking and financial system of our country without negatively impacting stability, which is crucial. Consequently, various information and announcements are being released within the country.
Once the government reaches a final decision, we are prepared to inform both the parliament and the public. This is an extremely sensitive matter that significantly influences the market situation. Therefore, it is vital that we refrain from making statements that create doubts regarding this optimization, as it helps maintain stability in our financial market. We must all act responsibly in this regard. Following the President’s visit to France, we anticipate gaining a better understanding of these issues, particularly concerning the restructuring of foreign debt.
There have been criticisms on the political platforms concerning the current economic program implemented by the government. However, if the groups criticizing had a need or a plan, and possessed the capability, they would have an opportunity to confront that challenge. Only President Ranil Wickremesinghe has accepted that challenge. He has communicated to the people the progress made by the country since assuming office as President. While the leaders responsible for meeting the needs of the people fulfils their duties, those who have not taken on this responsibility continue to make various statements. Specifically, the JVP platform has expressed various opinions regarding the management of the economy. However, none of these statements present any practical ideas or programs for building the country.
The aim is to find a solution to the economic crisis without relying on the intervention of the International Monetary Fund (IMF). The government seeks to address the challenges and overcome the crisis through its own program, without external financial assistance. The specific solution that does not involve the IMF’s intervention is not mentioned.
While there are claims of providing a solution without IMF support, it is implied that such claims may lack substance. The challenging times we have faced are gradually coming to an end, and there is a belief that better progress will be achieved through the government’s program.
The IMF predicts a decrease in the negative growth rate from -7.8 to -3 by the end of the year. However, the government’s commitment and efforts are expected to lead to positive developments in 2024.
The government has achieved more results than anticipated thus far, and it is important to maintain the commitment made by the government.
The country’s progress in terms of transparency, combating corruption, and addressing fraud has gained international attention. The parliamentary week, which begins today, is expected to enhance confidence in Sri Lanka’s economy, administrative structure, and financial system. The Budget Office Bill and an Anti-Corruption Bill will be debated and passed in parliament, contributing to the country’s progress.
Passing these bills is crucial to boost the strength of the country’s financial market and attract investments. It may also lead to a change in rating agencies’ opinions about Sri Lanka. The first review with the IMF in September will showcase the progress made and the current program being implemented. Alternative measures have already been taken to address the slight decrease in income levels. Overall, the economic process is being successfully implemented in the country, though it may take some more time for the people to feel its effects.
As a government, we are committed to advancing this program. Any opposition or attempts to destabilize the political and social stability established can have consequences worse than those experienced during the weak economy of the previous year. Despite short-term challenges, we need everyone’s support to steer the country onto a new path, ensuring a clear future and preventing similar crises from occurring again.
Two groups exist in the country: one that capitalizes on the people’s suffering during the economic crisis to advance their political goals, and another that genuinely supports the government’s efforts to overcome the crisis. Some individuals attempt to spread misinformation and false news. As a government, we strive to provide accurate information based on correct data and statistics to enable people to make informed decisions.
Colombo (LNW): Several spells of showers will occur in Western, Sabaragamuwa, Central and Northern provinces and in Galle, Matara and Puttalam districts, and a few showers will occur in North-Central province and in Kurunegala district, the Department of Meteorology said in its daily weather forecast today (20).
Showers or thundershowers may occur at a few places in Uva province and in Ampara and Batticaloa districts during the evening or night, the statement added.
Strong winds about (40-45) kmph can be expected at times in western slopes of the central hills, Northern and North-Central provinces and in Puttalam, Hambantota and Trincomalee districts.
General public is kindly requested to take adequate precautions to minimise damages caused by temporary localised strong winds and lightning during thundershower.
Marine Weather:
Condition of Rain:
Showers or thundershowers will occur at several places in the sea areas off the coast extending from Kankasanthurai to Matara via Mannar, Puttalam, Colombo and Galle. Showers will occur at a few places in the other sea areas around the Island.
Winds:
Winds will be south-westerly and speed will be (25-35) kmph. Wind speed may increase up to (50-60) kmph at times in the sea areas off the coast extending from Hambantota to Pottuvil. Wind speed may increase up to (45-50) kmph at times in the sea areas off the coast extending from Trincomalee to Hambantota via Kankasanthurai, Mannar, Puttalam, Colombo and Galle.
State of Sea:
The sea areas off the coast extending from Hambantota to Pottuvil will be rough at times. The sea areas off the coast extending Trincomalee to Hambantota via Kankasanthurai, Mannar, Puttalam, Colombo and Galle will be fairly rough at times. Temporarily strong gusty winds and very rough seas can be expected during thundershowers.
The Sri Lankan Ambassador to the United Arab Emirates Udaya Indrarathna, Chairman and Chief Executive Officer of London Executive Coaching and Consulting, and celebrated creator of the revolutionary “7 Day-Mini MBA,” has been bestowed with a “Global Order of Outstanding Disruptors” (GOOD) Fellows award at last week’s Global Wealth Conference in London.
The SWFI Global Wealth Conference, hosted by the Sovereign Wealth Fund Institute (SWFI), is an unrivaled event that unites influential leaders, experts, and professionals from the global wealth management industry. It serves as an electrifying platform for thought-provoking discussions, cutting-edge knowledge sharing, and unparalleled collaboration opportunities.
Ambassador Indrarathna’s extraordinary contributions and visionary leadership in the fields of strategy and roadmaps, executive coaching, consulting, and wealth management have propelled him to this recognition. As the Sri Lankan Ambassador to the UAE, he plays a pivotal role in forging robust diplomatic ties and catalyzing bilateral trade and investment between the two nations.
Beyond his diplomatic responsibilities, Udaya Indrarathna became renowned as the Chairman & Chief Executive Officer of London Executive Coaching and Consulting, where he has steered numerous professionals and organizations towards achieving their full potential and driving strategic business growth. He is a former Senior Advisor to the Chairman’s Office – Abu Dhabi Tourism and Culture Authority (DCT)– Government of Abu Dhabi for five years and held office as an Executive Director, Policy & Strategy for Government of Dubai (DTCM) for more than ten years. Ambassador Udaya Indrarathna is the former vertical CEO, Executive Committee Member for Ajlan Bros Holding, the Multibillion dollar global conglomerate based in Riyadh, Saudi Arabia.
The award bestowed upon Ambassador Indrarathna at the SWFI Global Wealth Conference serves as a testament to his exceptional achievements, unwavering dedication, and groundbreaking contributions to the global wealth landscape. Through his exceptional expertise and visionary approach, he has consistently demonstrated the ability to navigate intricate challenges and drive transformative change.
On receiving the award, Ambassador Udaya Indrarathna stated, “I am humbled to have been recognized with this coveted award at the SWFI Global Wealth Conference at the world famous Guild Hall. Sri Lanka may be a small country, but this shows that with the right strategy and determination, we can play a key role on the global stage. I remain steadfast in my commitment to empower leaders, foster economic growth, and spearhead advancements in the global wealth management industry.”
The SWFI Global Wealth Conference offered an unparalleled platform for industry leaders, experts, and policymakers to exchange groundbreaking ideas, explore emerging trends, and forge collaborative partnerships to shape the future of the wealth management industry. Ambassador Udaya Indrarathna’s eloquent speeches highly focused on Sri Lanka’s future prosperities, and invaluable insights infused the discussions with a renewed energy, leaving an indelible impact on the attendees.
