The Samagi Jana Balawegaya (SJB) yesterday said it wastotally against the appointing of Ajith Nivard Cabraal as the Governorof the Central Bank.
SJB MP Eran Wickramaratne commenting on the report said that theGovernor of the Central Bank has resigned and certainly he has thefreedom to do so but the concern is that a former Governor of theCentral Bank may be appointed and if there is any truth in it, it istotally unacceptable.
Wickramaratne addressing the media at his politicaloffice at Kirullapone today said that Central Banks are alwaysindependence of the governments and they are not a department of theGovt. Their primary responsibilities are looking at the stability offinancial system and secondly making sure the inflation is undercontrol. Therefore, the CBSL needs to have the independence to ensurethese policies.
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Former Governor of the Central Bank is a politicianmore over a minister in the present government. It is very clear ifyou are a politician or a minister you cannot be appointed to becomethe Governor of the Central Bank. Usually a very experienced officialfrom the bank can aspire to be appointed. If an out sider, he shouldhave the economic and monitory economic backgrounds. Some might hidebehind and think by resigning from the ministerial post and become thegovernor of the CBSL. It cannot be done as there is a conflict ofinterest. That is impossible to do. There has to be a cooling ofperiod before such an appointment is made.
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There were in the Presidential Commission of Inquiry onthe Bond Scam for a requirement to have a forensic audit on thetransactions that took place between January 2002 and February 28,2015. There are five Forensic report done by reputed institutes suchas PDO and KPMG. These reports talk about the conflict of interestwhere many members of Mr. Cabraal’s family were in various financialinstitutions during the time Mr. Cabraal was the Governor. It revealsof a potential conflict of interest noted between July 2006 to Jan2015. Dr. W.A. Wijewardene, a retired Deputy Governor has confirmedthere has been a conflict of interest and also Mrs Mano Ramanathan hasrevealed to the Forensic Committee that no declaration was made to theMonetary Board about the conflict of interest as required by the law.
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Under this context MrCabraal is very, very unsuitableto be the Governor of the CBSL before the government investigated therevelations in the Forensic Audit Reports about the involvements ofMr. Cabraal I as the Minister of State for Finance could not be ableto follow it up as these reports came out at the end of 2019. But thisgovernment has tried to sweep these reports under the carpet, that isnot possible as these are forensic audits that came through aPresidential Commission and they must be investigated.
In addition to that he said that anyone can read fromthe internet on 18 February 2021, a report talks about a politicaldonor was sentenced to imprisonment for 12 years in the USA for thecrime committed by him for lobbying and campaign contribution crime,The GOSL had hired this person called Zuberi in 2014 for an imagebuilding project of Sri Lanka in USA and agreed to pay him USD 8.5million. We have paid 6.5 M Dollars to Zuberi but nothing came outfrom him.
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Mr. Wickramaratne asked as to who paid this money.Though it has to be approved by the Cabinet or by the Government,there was no such approval, but has been paid by the Central Bank .Who in the CBSL was responsible for this .Did the Monetary Bord knewabout it. The then Governor of the Central Bank is responsible, thesemust be investigated . How can a government even consider appointing,a person like that again as the governor of the central bank. Heemphasized that a country is more important than an individual .Commercial Banks international agencies, Rating agencies will beconcerned and Wikremarathne expressed the confidence that the Govtmakes the right decision.
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In the meantime MrWickramaratnealso said that the Govt has imposed a100 percent cash margin when opening letters of credit on over 600items includingMobile Phones and Computers describing them as non -essential goods. But the SJB Parliamentarian Mr. Eran Wickramaratneaddressing the media at his political office, at Kirullaponeyesterday said when he inquired from two banks they said that evenwith 100 % margin it is impossible to open an LC because they don’thave the dollars. The Central Bank is not issuing dollars to thecommercial banks which is essential to pay for an LC.
This restriction of 100 % margin will again help the cronies who aremajor importers to monopolize the market . It is not only they canafford to keep the required margin from their saving withoutadditional cost of finance, they might even have the dollars to meetthe needs. Normally there is no interest accrued by the importers onthe deposits made for an LC and as a result the SMEs in the countrywill find extremely difficult as they don’t have the savings to keepthe required 100 % margin and probably, they may be thrown out ofthis business. As a result of this new regulation by the government tosave its face from the shortage for dollars, will put up the prices ofthese goods.
The list which could be considered as a virtual ban includes Mobilephones, computers among over 600 items declared as non-essentialgoods by the government. Ours is the only country where students havemost number of “Home -days than the School days” as the government iskeeping our kids at homes. due to pandemic and amidst this, Mobilephones and the computers have become essential goods to learn online.
“The critical matter is the CBSL will not sell dollars to banks to paywhen the LC becomes due . This is the big problem faced by thecommercial banks. There is a dollar shortage in the country, what isthe government doing about it. What kind of policies this governmentis pursuing? Are they taking back the people to the dark eras of quesand shortages So this is an absolute nonsense” declared Mr.Wickramaratne.
MrWickramaratne emphasized that the real issue is dollar shortage andwe need to address that primary issue as a country, if we are to comeout of this problem.