Asian Development Bank approves a USD 350mn loan to SL to provide “budget support for economic stabilization”: accordingly, the bulk of these funds would be utilised to pay govt servants salaries & pensions and interest, and not to fund any revenue-generating capital project.
Bangladesh Bank says SL has paid back another USD 100mn of the USD 200mn it borrowed 2 years ago, thereby increasing the total repayments to USD 150mn: expresses hope the balance will be repaid by September: previously, SL had announced that a part of the credit line from India had also been “settled” immediately after receiving the 1st trance from IMF: analysts say these “settlements-in-full” to selected bilateral creditors is likely to have an impact on the overall debt restructuring effort of the Govt.
Defence Minister of India Rajnath Singh’s visit to SL scheduled for 2 & 3 September, deferred: the purpose of the visit was earlier announced as “to review bilateral defence ties”: India had previously raised security concerns with the SL govt over the Chinese ship ShiYan 6’s planned docking at the ports of SL from 26 October.
Indian Naval Ship “Delhi” docks at the Colombo port and welcomed by the SL Navy: the vessel is a 163-metre long Destroyer manned by a crew of 450 and commanded by Captain Abhishek Kumar.
An organisation called “The Civil Society Collective for Democracy” says recent statements from the President, Speaker & some MPs who are attempting to undermine judicial independence are “deeply troubling”: also says the recent acts of intimidation targeting members of the Election Commission and Public Utilities Commission are examples of the disabling environment: asserts the citizens’ sovereign right to vote has been infringed by using financial constraints as an excuse.
A collective of 80 Trade Unions write to the IMF to express their concerns about the ongoing Domestic Debt Restructuring process affecting the most vulnerable and marginalised citizens of the country: also say the people are now feeling the brunt of the IMF’s agreement with the Govt.
The core objectives of the visit of US Senator Chris Van Hollen (Member of the Senate Foreign Relations Committee and Appropriations Subcommittee on State & Foreign Operations) is reported as being to promote “enhanced security cooperation, deepening economic ties, collaborative initiatives to address climate change, and the advancement of democracy & human rights”.
Central Bank’s “money printing” increases by Rs.33 bn this week to fund the significant shortfall in the subscription for the week’s Treasury Bills issue: analysts point out the Central Bank will be precluded from doing so after the Speaker confirms the passage of the new Central Bank Act which has already been passed by Parliament.
IGP C D Wickramaratne says steps will be taken to resolve concerns regarding traffic offences being video recorded by the traffic police and then released to the media: the IGP was responding to concerns raised by the Parliamentary Consultative Committee on Public Security surrounding the ethicality of the release of such videos to the media.
Sri Lanka’s victory over Bangladesh in their tournament opener in the ongoing Asia Cup, marks the record for their longest winning streak of 11 consecutive victories in one-day internationals: this winning streak is due to their prowess in bowling, as they have dismissed their opponents for the 11th successive game.
Colombo (LNW): The charges on public transportation services have been increased in response to the recent fuel price hike, announced the National Transport Commission (NTC).
Accordingly, the bus fares will increase by 4.01 per cent from midnight tomorrow (02).
The minimum fare, however, will remain unchanged, the Commission noted.
Meanwhile, container haulage charges will soar by 5 per cent, according to the Association of Container Transporters, effective from today (01).
Colombo (LNW): The Sri Lankan Rupee indicates further appreciation against the US Dollar today (01) in comparison to yesterday, as revealed by the official exchange rates list issued by the Central Bank of Sri Lanka (CBSL).
Accordingly, the buying price of the US Dollar has dropped to Rs. 314.19 from yesterday’s Rs. 315.33, and the selling price to Rs. 325.86 from yesterday’s Rs. 326.93.
Meanwhile, the Sri Lankan Rupee has also appreciated against several other foreign currencies as well.
Colombo (LNW): The licence of Bimputh Finance PLC (BFP) will be canceled as it has continuously been violating provisons of the Finance Business Act (FBA), the Central Bank of Sri Lanka (CBSL) announced in a statement today (01).
Despite several time extensions granted to Bimputh Finance by the CB Monetary Board to comply with the provisions of the FBA, Directions and Rules issued thereunder and adhere to the Masterplan for Consolidation of Non-Bank Financial Institutions (the Masterplan), no satisfactory progress has been made by BFP to revive the critical condition faced by BFP, the island nation’s monetary regulator said in its statement.
Full Statement:
Bimputh Finance PLC-Cancellation of Licence issued under the Finance Business Act, No. 42 of 2011
Bimputh Finance PLC (BFP), a Licensed Finance Company under the Finance Business Act, No. 42 of 2011 (FBA) has continuously been violating/contravening provisions of the FBA, several general Directions and Rules that have been issued with the view to achieve the overall objective of financial system stability and also specific directions issued to BFP in order to address the critical financial position of the company. Consequently, the financial condition of BFP had been deteriorating due to deficient capital level, poor asset quality and continuous losses.
Despite several time extensions granted to BFP by the Monetary Board of the Central Bank of Sri Lanka (Monetary Board) to comply with the provisions of the FBA, Directions and Rules issued thereunder and adhere to the Masterplan for Consolidation of Non-Bank Financial Institutions (the Masterplan), no satisfactory progress has been made by BFP to revive the critical condition faced by BFP.
In view of the above, the Monetary Board has decided to cancel the licence issued to BFP under the FBA to carry on finance business, with effect from 01.09.2023. Accordingly, BFP is not allowed to engage in Finance Business with effect from same date.
Largely complying with the Monetary Board directions issued, BFP managed to repay major portion of its deposit liabilities during 2022 and Sri Lanka Deposit Insurance and Liquidity Support Scheme (SLDILSS) will initiate necessary actions to pay compensation to the unclaimed depositors of BFP, up to a maximum of Rs. 1,100,000/- per depositor as per the regulations of the SLDILSS. Accordingly, all eligible depositors of BFP will be able to recover their deposits in full through SLDILSS upon submitting due claims within two years from the date of cancellation of licence or before the appointment of the liquidator by competent court, whichever occurs earlier as per the regulation of SLDILSS.
Further, all debtors of BFP are advised to repay their dues to BFP on time, only through a bank account under the name of BFP and maintain records for all such payments.
You may contact the Department of Supervision of Non-Bank Financial Institutions through following for further clarifications.
Telephone : 0112 477229, 0112 477504 Fax : 0112 477 738 E mail : [email protected]
Colombo (LNW): The no confidence motion proposed against Health Minister Keheliya Rambukwella will be taken up for parliamentary debate in the chambers next week, as decided by the Parliamentary Business Committee.
Accordingly, the no confidence motion against the Minister will be taken up for debate on September 06, 07 and 08, 2023, and the voting will take place at 5.30 pm Friday, September 08, 2023.
Colombo (LNW): Matara Branch of Sri Lanka Red Cross Society is set to launch its sixth medical clinic at Kotapola Waralla Junior School in Matara this Sunday (03).
The clinic will operate full day providing free medical services for diabetes, high blood pressure and all other diseases, and will also provide free medical tests, treatments and medication, Red Cross said in a statement.
Persons requiring further treatments will also be referred to the main hospitals that day, the Society added.
Colombo (LNW): Teh Sri Lankan Rupee has further appreciated against the US Dollar at leading commercial banks in the country today (01) in comparison to the day before.
Accordingly, Peoples Bank reveals that the buying price of the US Dollar has dropped to Rs. 311.42 from Rs. 312.88, and the selling price to Rs. 326.05 from Rs. 327.58.
At Commercial Bank, the buying and selling prices of the US Dollar remain unchanged at Rs. 313.72 and Rs. 326, respectively.
At Sampath Bank, the buying price of the US Dollar has dropped to Rs. 312 from Rs. 314, and the selling price to Rs. 323 from Rs. 325.
Colombo (LNW): The government has extended a date for pension funds and the Employees Provident Funds to exchange Treasury bonds to September 11 following a delay in enacting a penal interest rate for superannuation funds along with the pending Supreme Court case.
A legal amendment to change the Inland Revenue Act to charge 30 percent tax from superannuation funds instead of the current 14 percent, has been delayed amid the legal challenge.
Placing the entire burden of domestic debt restructuring on ‘captive’ institutions — the Central Bank and the EPF, which is managed by the monetary board— is an easy option for the government, eminent economic experts claimed.
But the favoured treatment of commercial banks and domestic government security holders compared to the EPF is an inequitable distribution of the burden of debt restructuring, they added.
Two bonds (9.00 percent 01 Sept 2023 and 11.20 percent 01 September 2023 bond) would be excluded from the list of eligible bonds as they will mature before the offer date. The bonds would also be excluded from the offers that had been accepted.
The participation threshold for 1 October 2023 (7.00-pct), 15 November 2023 (6.3 -pct) and 15 December 2023 (11.6-pct) would be changed to 50 percent.
The participation threshold for 1 October 2023 (7.00-pct), 15 November 2023 (6.3 -pct) and 15 December 2023 (11.6-pct) would be changed to 50 percent.
The present government’s income tax policy to attract an effective tax rate of 30% would require a salary above Rs. 500,000 per month. Probably 90% of the working population draws less than 500,000 per month, economic analysts said.
This government is now amending the income tax laws to impose a 30% income tax on EPF/ETF.
This tax will apply on all of EPF/ETF income without any tax relief. Therefore, even an employee earning a monthly salary of Rs. 30,000 will be liable to bear the tax of 30% on their savings on EPF/ETF.
The present government’s income tax policy to attract an effective tax rate of 30% would require a salary above Rs. 500,000 per month. Probably 90% of the working population draws less than 500,000 per month.
This government is now amending the income tax laws to impose a 30% income tax on EPF/ETF. This tax will apply on all of EPF/ETF income without any tax relief.
Therefore, even an employee earning a monthly salary of Rs. 30,000 will be liable to bear the tax of 30% on their savings on EPF/ETF.
At the end of 25 – 30 years of employment, the EPF holder bears an accumulated reserve with low interest. It is estimated that the monthly return will cover between 20% – 35% of an individual’s cost of living in retirement. Proposed 30% tax on EPF will further reduce income.
‘Is this justified against low income workers?’ asked SJB, Parliamentarian Eran Wickramaratne issuing a special statement. Foreigners invest in bonds of small countries looking for more income, absorbing the risk factor. Having already profited from the high interest/income, restructuring of said loans does not bear significant consequences to the investors, he added.
