Penalties have been imposed on DFCC, Bank of Ceylon, People’s Bank, National Development Bank and the National Savings Bank

The CBSL further said that the money collected as penalties were credited to the Consolidated Fund.

Sources from the ministry say that a list of these loss-making SOEs and figures will be compiled to be tabled before parliament.

The government is also planning to restructure loss bearing SOEs.

The Governor stated this when Parliamentarians inquired regarding the aforesaid at the Ministerial Consultative Committee on Finance, Economic Stabilization and National Policies held yesterday (16) in Parliament chaired by the State Ministers of Finance Hon. Ranjith Siyambalapitiya and Hon. Shehan Semasinghe.

The Members of Parliament pointed out that due to the increase in interest rates, the entire income of some creditors has to be paid for loan installments.  The CBSL Governor said that customers can pay only the relevant interest for a grace period in consultation with the bank. He further added that instructions have been given to the banks in this regard.

Also, the CBSL Governor said that the average inflation which was at a value of 70% two months ago has now decreased to 66% and the food inflation which was at 95% has decreased to 85%. He further stated that with the existing fiscal policies, this figure is expected to reach 4-5% by the end of next year. Furthermore, according to the conditions of the International Monetary Fund, a new act has been drafted to make the Central Bank an independent institution and the necessary work is being done, the CBSL Governor added.

Furthermore, the committee drew attention to the difficulty in exchanging dollars to rupees by banks. State Ministers of Finance – Ranjith Siyambalapitiya asked the CBSL Governor regarding the stated issue to which the Governor responded saying that the Central Bank has not given any advice that would cause such delays.

State Minister – Shehan Semasinghe also said that according to a report of the Department of Public Enterprises, 22 out of 126 institutions have not submitted their annual reports for more than 5 years and some institutions have delayed the submission of annual reports for about 7 years. Accordingly, the State Minister said that since he will be working with the International Monetary Fund in the future, he instructed the heads of the institutions to submit the annual reports within the stipulated time.

Leader of the Opposition – Sajith Premadasa, Members of the Committee – Jagath Kumara Sumithraarachchi, Sahan Pradeep Withana and Parliamentarians Secretary to the Treasury/Ministry of Finance, Economic Stabilization and National Policies, Mr. K M Mahinda Siriwardana, officials representing the Ministry and institutions affiliated to it were present at the Committee meeting held.

The meeting was chaired by the Secretary to the Treasury and the Ministry of Finance, Mr. K M Mahinda Siriwardana, and the Governor of the Central Bank of Sri Lanka, Dr. P. Nandalal Weerasinghe.

Sri Lanka remains fully committed to advancing engagements with all its creditors in an equitable and transparent way. The meeting represented another important step towards securing International Monetary Fund (IMF) Board approval for Sri Lanka’s IMF program, a media release by the President Media Division said.

The State Minister of Finance, Mr. Shehan Semasinghe, has said:

“Sri Lanka is at a critical stage, and we are seeking IMF program approval as soon as possible so that we can restore macroeconomic stability. We are grateful to our bilateral partners for their continued engagement and support during this process. The IMF program and our ambitious economic reforms will restore public debt sustainability, help protect the most vulnerable and restart our growth engine. This government is focused on re-establishing social and economic prosperity, and ensuring our citizens have access to critical public services.”

The Governor of the Central Bank of Sri Lanka, Dr. P. Nandalal Weerasinghe, has said:

“The IMF program and economic reform agenda will reconstitute Sri Lanka’s financial buffers. I thank the official creditors for joining this productive meeting where we were able to discuss Sri Lanka’s current financial position and progress on reforms.”

Sri Lanka reached a Staff-Level Agreement with the IMF on a four-year program supported by the Extended Fund Facility on 1st September 2022. The program, amounting to USD 2.9bn, is expected to restore macroeconomic stability and debt sustainability while protecting the vulnerable and safeguarding Sri Lanka’s financial system. This agreement remains subject to IMF Executive Board approval.

The IMF program has been centred around Sri Lanka’s ambitious reform program. The government’s reform agenda is based on four pillars:

1. The first pillar is fiscal reform. The program foresees the implementation of ambitious revenue-based fiscal consolidation measures, combined with revenue administration reforms and the introduction of fuel and electricity pricing mechanisms to minimize fiscal risks stemming from SOEs. It also includes the enhancement of existing social safety nets to protect the most vulnerable;
2. The second pillar will be to restore public debt sustainability. Sri Lanka’s debt situation has been deemed unsustainable by the IMF and will need to be addressed by a comprehensive debt treatment;
3. Thirdly, the program will aim to restore price stability and rebuild external buffers. The government is committed to refraining from any monetary financing and the Cabinet will soon approve the Central Bank Act that will strengthen the Bank’s independence and modernise its policy framework;
4. The fourth pillar of the program is the safeguarding of financial system stability, a key condition to Sri Lanka’s economic recovery. This will be achieved by ensuring that Sri Lanka’s banking system is adequately capitalised and by strengthening the resilience and governance of its state-owned banks.
5. In addition to these pillars, the government will introduce a series of anti-corruption reforms that will align Sri Lanka’s legal framework with international standards and will implement broader structural reforms to unlock Sri Lanka’s growth potential.

The Central Bank issued the directives under the Banking Act No. 30 of 1988 and the Finance Business Act, No. 42 of 2011.

Accordingly, it will be mandatory to record a unique identification number for each customer when making deposits with licensed banks and licensed financial companies from October 1 this year.

However, the financial institutions have been given time till 31.12.2023 to finalize the unique identification numbers for depositors already maintaining accounts.

The Central Bank further said that underage depositors can be issued a 12-digit number obtained by recording the date of birth and birth certificate number.

Mrs. Daulagala has over 31 years of service at the Central Bank in different capacities in the areas of supervision and regulation of non-bank financial institutions, macroprudential surveillance, finance, international operations, risk management, regional development, human resource management and training and development.

She has served as the Chief Accountant and Director of Supervision of Non-Bank Financial Institutions and Financial System Stability and has contributed towards strengthening the legal framework and governance in the non-bank financial institutions sector.

Prior to the appointment as a Deputy Governor, Mrs. Daulagala held the position of Assistant Governor and was in-charge of the Macroprudential Surveillance Department and the Centre for Banking Studies and served as the Secretary to the Monetary Board.

She also served as Secretary to the Board Risk Oversight Committee, Monetary Board Advisory Audit Committee and the Ethics Committee.

Further, she was on release to the Ministry of Finance and Planning where she served as the Director General of the Department of Public Enterprises. While holding the position at the Ministry, she served as an Ex-Officio Director of the Bank of Ceylon representing the Treasury and as a member of the Employee’s Trust Fund Board.

At present, Mrs. Daulagala serves as the Chairperson of the Sri Lanka Accounting and Auditing Standards Monitoring Board.

Mrs. Daulagala holds a Master of Science Degree in Financial and Business Economics from the University of Essex, United Kingdom, and a Master of Business Administration Degree from the University of Sri Jayewardenepura. She is a Fellow member of Chartered Institute of Management Accountants, United Kingdom.