People’s Bank has taken steps to further strengthen trade related services with India by opening an Indian rupee (INR) account with HDFC Bank, India.
This account will facilitate executing telegraphic transfers, performing foreign exchange transactions and result in expediting international trade transactions.
People’s Bank Chai-rman Sujeewa Rajapakse said: “We are very pleased to partner with the India’s leading financial service provider HDFC Bank which has a branch network of over 6000.
This will undoubtedly allow us to provide an enhanced range of international banking services to our clients who aspire to capitalise on the huge market opportunity our giant neighbour is presenting.”
CEO/General Manager Ranjith Kodituwakku said: “The INR account opened with HDFC Bank will allow us to provide all types of trade-related transactions including remittances and student payments to India.
The trust that HDFC’s customers and providers of capital have placed in it over the years has almost become legendary in the Indian corporate world and we at People’s Bank are happy to provide the same service to our customer base that wants to reach the Indian market.”
The Indian government has opened five special vostro accounts for trade in rupee with Sri Lankan banks with a view of facilitating trade with the island nation, official sources said
SBI Mauritius Ltd and People’s Bank of Sri Lanka opened an SVRA with State Bank of India (SBI). In addition, Bank of Ceylon opened an account in its Indian subsidiary in Chennai recently.
Union Bank of India has opened spec opened special rupee account of Ros Bank Russia while Chennai-based Indian Bank has opened such accounts of three Sri Lankan banks, including Colombo-based NDB Bank and Seylan Bank
These special vostro rupee accounts (SVRA) with banks of Sri Lanka rationalizing the rupee trade arrangement.
Under the rules, any surplus in these rupee accounts can be invested in treasury bills and government securities. Banks want to understand how these securities will be transferred to the buyers.
Under the arrangement announced by the RBI on July 11, an authorised bank in India can open special rupee vostro accounts of correspondent banks of any partner trading country.
In view of the increasing interest of the global trading community in the Indian Rupee (INR), Reserve Bank of India (RBI) allowed for a settlement mechanism to carry out transactions in the rupee, with immediate effect.
This system will pave the way for facilitating trade with countries currently unable to conduct transactions in US Dollars, Euro, or other dominant foreign exchange currencies.
People’s Banks open Vostro account with HDFC Bank, India
Kanrich to settle public liabilities before merger with Nation Lanka PLC
Kanrich Finance Limited (KFL) has been directed to settle its public liabilities in full within the period from 26.12.2022 to 28.02.2023 in terms of the Finance Business Act, due to continuous capital deficiencies faced by the finance company.
The Monetary Board of the Central Bank of Sri Lanka had issued this directive as a measure to strengthen the Non-Bank Financial Institutions Sector under the ‘Masterplan for Consolidation.
The aforesaid direction was issued in the best interest of depositors and promissory note holders of KFL, subsequent to securing measures to have adequate funds available for KFL to fully settle its public liabilities and further directing KFL to exit from the finance business after such settlement, CB said.
Accordingly, KFL will take necessary actions to settle the entirety of public liabilities with interest accrued up to 26.12.2022 at agreed upon interest rates.
All depositors and promissory note holders of KFL are requested to avail this settlement plan and claim their funds prior to 28.02.2023.
Ina latestet development Nation Lanka Finance PLC (NFL) has stepped into amalgamate with Kanrich Finance Ltd. under the Master Plan for Consolidation of Non-Bank Financial Institutions.
NFL said the company has received the approval of the Monetary Board of the Central Bank for the move aimed at meeting the deficit of the Capital Adequacy requirements.
The NFL will be the surviving entity and is required and expected to complete the Amalgamation process with the relevant approvals on or before 31 March 2023.
The NFL requires Rs. 2.5 billion to comply with regulatory requirements. At present existing capital funds as at 31.03.2022 is Rs. 413 million. It concluded a Rights Issue of Rs. 1.1 billion recently.
V.R. Ramanan owns 55.5% stake in NFL and U.H. Dharmadasa holds 9.6% along with related party Ceyoka Ltd., (8%) and H.K.J. Dharmadasa (6.5%). The NFL has 13,728 shareholders.
The Securities of the company were transferred to the Watch List as per the Enforcement Rules of the CSE on 29 September 2020; 7 September 2021 and 9 September 2022, due to the emphasis of matter on going concern contained in the Independent Auditor’s Reports in the Financial Statements for the years ended 31 March 2020, 2021 and 2022.
The emphasis of the matter on going concern was expressed by the Auditors due to adverse impact on the profitability of the company as a result of continuous restrictions imposed on the company consequent to non-compliance with the minimum Core Capital requirements laid down by the regulatory authority.
The company requested to the, Securities and Exchange Commission of Sri Lanka (SEC) to grant an extension to resolve the aforesaid matter (i.e. emphasis of matter on going concern) and accordingly SEC granted 05 extensions up to 31 December 2021; 31 March 2022, 30 June 2022, 30 September 2022 which has been further extended until 31 December 2022.
As at 30 September 2022, retained loss of NFL was Rs. 964 million up from Rs. 545 million as at 31 March 2022. Assets amounted to Rs. 8 billion and liabilities were Rs. 7.7 billion. For six months ended 30 September 2022, NFL reported a net operating loss of Rs. 416.7 million as against a loss of Rs. 198 million a year ago.
SL’s inflation slowed in December for third consecutive month – Bloomberg
(Bloomberg) — Sri Lanka’s inflation slowed in December for a third straight month as tight monetary policy crimped demand and supply conditions normalized.
The consumer price index in the capital Colombo eased to 57.2% from a year ago, the statistics department said in a statement released Friday. That compares with 61% in November and a median of 56.6% in a Bloomberg survey.
Moderating global commodity and food prices eased price pressures. Transport costs rose 132.1% from a year go, while food prices rose 64.4%, the data showed.
Cooling prices support the Central Bank of Sri Lanka’s disinflation expectations and gives the monetary authority more room to help turnaround the economy that is weathering its worst economic meltdown in decades. It has raised borrowing costs by 9.5 percentage points to 15.5% so far this year.
The central bank last month forecast inflation would slow to 4%-5% by the end of 2023 after peaking near 70% this year.
Sri Lanka has fulfilled most preconditions for a $2.9 billion International Monetary Fund bailout and is currently focused on bilateral debt restructuring in order to secure board approval for the program.
Bloomberg
Public Officers granted special advance for 2023
Public officers have been granted a special advance of an amount not exceeding Rs. 4000 in 2023, as per a circular issued by the Ministry of Public Administration.
Dated 29.12.2015, the Public Administration Circular 26/2015 outlines the following;
- It has been decided by the Government to pay a Special Advance of an amount not exceeding Rs. 4000 for the year 2023, as per the provisions of the said circular subject to the substitution of year 2022 for year 2015 in para 03 of the said circular and substitution of year 2023 for year 2016 in all places where it is mentioned.
- The payment of this advance should commence on 01.01.2023 and be completed on 28.02.2023. No payment should be made after 28.02.2023. This advance should be completely recovered within the year 2023.
- This circular is issued with the concurrence of the General Treasury.
MIAP
DMT announces news changes in vehicle transfer forms
The Department of Motor Traffic (DMT) has amended the MTA6 and MTA8 forms used for vehicle ownership transfers, effective from December 30, 2022.
In a statement, the DMT stated that the forms have been amended with the aim of improving customer service.
Special announcement on retirement age of railway workers
All essential workers reaching their retirement by completing their 60 years of age today (31) will be reemployed on contract basis as per the instructions of the Presidential Secretariat, announced the Sri Lanka Railway Department.
MIAP
Presidential Task Forces brief on enhancing the rank in the Ease of Doing Business Index
Officials representing the 8 Presidential Task Forces established under the Presidential Secretariat to enhance the Ease of Doing Business in Sri Lanka recently presented the issues and proposals to the ‘Select Committee of Parliament to study the practical problems and difficulties that have arisen in relation to enhancing the rank in the Ease of Doing Business Index in Sri Lanka and make its proposals and recommendations’.
These matters were discussed when the said committee met in Parliament recently (27) under the chairmanship of MP Madhura Withanage.
The heads representing the Sri Lanka Customs, Ministry of Justice, Urban Development Authority and other government agencies representing the Presidential Task Forces established in relation to business facilitation in Sri Lanka presented detailed information to the committee. In relation to business, promoting online systems, reducing human involvement, reducing time spent as much as possible and increasing efficiency were discussed at length. Also, the action plans of the 8 presidential task forces were also discussed here and the Parliamentarians present inquired about the registration of a business, its improvement and the support that can be provided by the public sector.
Also, the committee’s attention was drawn to the issues existing in the judicial sector regarding the facilitation of business in Sri Lanka and the related solutions, especially the cases in the Commercial High Court.
Committee Chief Withanage pointed out that it is important to prepare awareness programs from the regional secretariat level regarding each of these aspects.
MPs Anura Priyadarshana Yapa, Mohammed Mussammil, Sanjeeva Edirimanna, Kokila Gunawardena and Lalith Varankumara were also present at the occasion.
MIAP
Food security drive malpractices of previous regime exposed
The previous Gotabaya Rajapaksa regime’s initiative of maintaining rice security and organic fertilizer drive has been tainted with malpractices, corruption and waste of taxpayers’ money, official sources revealed.
Amid a hard-hitting economic crisis and worsening COVID-19 situation, Sri Lanka has declared a food emergency in September 2021 to deter hoarding and stabilize prices of essential items.
The then President Gotabaya Rajapaksa issued this order and appointed a major general to “oversee food distribution” in the island nation, which was under its third coronavirus lockdown in 2021.
He revoked this emergency declaration in April 2022 making an utter mess in the public administration procedures as well as administrative and financial regulations further ordering top officials to adhere to his word without any official circulars.
“Authorized officers have been given powers to provide essential food items at a concessionary rate to the public by purchasing stocks of essential food items including paddy, rice, and sugar,” read a statement issued by the presidential office at that time.
Under this set up financial provisions amounting to Rs.200 million had been provided to maintain 100000 mt rice security (buffer stock) at the stores network of the food commissioners department in early 2022.
But no such buffer stocks had been maintained till October 2022 and the sum of Rs 200 million was transferred to State Trading Corporation, auditor general’s department observed, adding that this was a serious matter in relation to food security in the country.
Now the million rupee question was as to what happened to this money transferred to STC, a senior treasury official said.
Meanwhile several irregularities have been exposed in the implementation of organic farming drive in the recent auditor general’s report opening a can of worms.
It has been observed that although the Agriculture Research and Production Assistants of the Agrarian Service Centers had been trained online on the production and use of organic fertilizer, and paying incentives to the farmers, the Department of Agrarian Development had paid a sum of Rs. 21.66 million to 06 media institutions to air awareness programs on the production and use of organic fertilizer, and paying incentives to the farmers.
Further the Ministry of Lands had produced 6,156.23 metric tons of fertilizer at a cost of Rs.302 million, and according to section 2 (1) (2) of the Regulation of Fertilizer Act No. 68 of 1988, a license should be obtained from the National Fertilizer Secretariat for the production of fertilizers, but it has not been obtained , the report revealed.
Although 777,720 kg of fertilizer produced under this project was sold to Colombo Commercial Fertilizer Company at Rs.15 per kg in the year 2021/2022 under review, the income of Rs.11.67 million due for that had not reported in the financial statements as deficit income.
More worms are expected to come out but those who were responsible for such suspicious financial transactions including then heads of the government and top officials are still allowed to enjoy life scot-free.
FAO scales up emergency and resilience interventions in Sri Lanka
The Food and Agriculture Organisation (FAO) of the United Nations is set to scale up its emergency and resilience interventions in Sri Lanka given the current unprecedented economic crisis in the country.
The FAO has assured President Minister Ranil Wickremesinghe that it will assist Sri Lanka in overcoming a possible food crisis.
The UN organization has given its word it will seek international assistance to address the food crisis the country may face in the near future.
“Sri Lanka’s immediate priority is to ensure that all citizens are provided with three meals a day,” he said.
In a prompt action towards this end, the UN food agency has already devised a food crisis response plan for Sri Lanka amidst threats of a food shortage in the country
This man made food crisis has been triggered by stupid shortsighted policies including the ban on chemical fertilizer imports and blunt economic tools proposed by former President Gotabaya Rajapaksa who was caught up in dead ropes of nutty advisors.
The response of the Food and Agriculture Organisation (FAO) of the United Nations came after President Wickremasinghe had warned of a food crisis in the island nation due to the ongoing economic crisis..
In its recent overview for the period of June to December 2022, the organisation said it plans to provide 201,148 households with a total of 10,057 tons of urea for paddy farming while providing another 53,000 farming households with unconditional cash transfers of $ 84 each.
In addition to this, the FAO is also set to provide 997,000 paddy farming households with 36,000 tons of triple superphosphate for the upcoming 2023 Yala season.
The organisation will also support fishing households by providing cash transfers of $ 141 each allowing the families to meet their immediate food security needs.
The FAO will also support communities by helping them set up 2,500 backyard gardens and facilitating capacity-building activities on improved nutritional and dietary practices, to enhance food production and nutrition at the household level.
The FAO in its report said humanitarian needs in Sri Lanka have continued to rise sharply as a result of political and economic upheaval in the country.
“Nearly 40% of the population of Sri Lanka depend on agriculture as a primary source of income.
The ongoing multidimensional crisis is posing an enormous threat to their livelihoods and disrupting the national food system,” it said, adding that agricultural production is in a downward trend since mid-2021.
This crisis made by the previous Rajapaksa regime was due to the unavailability of fertilizers and other essential production inputs while livestock keepers are unable to access feed and basic veterinary supplies; and fishers are unable to access fuel for motorized boats.
“Four in every ten households experienced a reduction in their incomes, and one in every two households are currently relying on negative coping mechanisms to cope with the lack of food or money to buy it.
The window of opportunity to support Sri Lankan farmers and their communities is narrowly time-bound.
“Immediate action to provide farmers with quality seeds, fertilisers and pesticides will enable them to protect their livelihoods and feed their communities.
It is also critical to provide the most vulnerable farmers, livestock keepers and fishers with cash assistance to enable them to restore their productive assets and fast-track their recovery,” it noted.
The FAO has distributed 2,381 tons of urea to 47,619 farming households while providing unconditional cash transfers to 15,021 households disbursing a total of approximately $ 1.4 million.
The beneficiaries included vulnerable green gram farmers and fishers in the poorest areas of Ampara, Anuradhapura, Badulla, Batticaloa, Hambantota, Jana, Kilinochchi, Matale, Monaragala, Mullaitivu, Polonnaruwa, Puttalam and Trincomalee, it said.
Sri Lanka Original Narrative Summary: 31/12
- Analysts forecast severe economic contraction in the 4Q 2022 and full year contraction of -9.3% YoY in 2022: down from forecast of -8.7% YoY previously: growth revised down for 2023 as well.
- Cardinal Ranjith says Sri Lanka should not go around the world with a begging bowl in 2023: calls for the establishment of a new structure to build the nation: critics say Cardinal is now involved heavily in political matters while the Catholic Church in Sri Lanka is losing its devotees to emerging Christian sects.
- Year-on-Year inflation based on CCPI decreases to 57.2% in December from 61.0% in November; Food Inflation decreases to 64.4% in December from 73.7% in November: analysts show this result is due to the higher base effect since November 2021.
- Local businesses urge the Central Bank to extend the moratorium beyond 31st December 2022: say SME borrowings have reached Rs.1,000 bn, which the sector is struggling to pay back, due to the prevailing high-interest rates: warn the banking sector would fall if the extension is not granted.
- Public Utilities Commission Chairman Janaka Ratnayake says he is awaiting for a call from President Ranil Wickremasinghe to discuss the allegations against him that he has been leading society astray with his claims that he would not allow an increase in electricity tariffs.
- UN Resident Coordinator’s Office announces the UN Humanitarian Appeal for Sri Lanka has received a response of USD 101.5 mn: says it hopes to provide humanitarian assistance to 3.4 mn vulnerable people with such funds.
- Rupee marks over 7-1/2 months of being “fixed” by the Central Bank within a pre-determined range: analysts previously critical that the Rupee was “fixed” under CB Governor Cabraal now beginning to accept the “fixed” exchange rate policy which current CB Governor Weerasinghe has also been following since 12th May 2022.
- Former MP Professor Ashu Marasinghe claims Rs.1.5 bn as damages from former MP Hirunika Premachandra and his former woman-friend Adarsha Karandana for insulting him by publicising an allegedly edited video carrying damaging and misleading content.
- President Ranil Wickremesinghe condoles the demise of Indian PM Narendra Modi’s mother, Hiraben Modi, 99: PM Modi tweets that “a glorious century rests at the feet of God”.
- Home Affairs State Minister Ashok Priyantha says services provided by govt institutions will not be hindered even though 30,000 public officials retire from service on 31st December 2022.