… draws attention to discrepancy in beneficial interest rates for EPF members

By Shamindra Ferdinando

Dissident SLPP lawmaker Gevindu Cumaratunga yesterday (18) said that the Wickremesinghe-Rajapaksa government owed an explanation how the Governing Board of the Central Bank had approved a massive salary increase to CBSL employees at a time the country was experiencing developing political-economic-social crisis.

The National List MP said the recent disclosure of over 70 percent salary increase to several different categories of CBSL employees should be brought to the attention of the International Monetary Fund (IMF), bilateral and private creditors as well.The Finance Ministry confirmed the salary increase when The Island raised the issue with a senior official.

President Ranil Wickremesinghe, in his capacity as the Minister in charge of Finance portfolio should explain the circumstances relatively affluent section of public sector workers received an unprecedented salary increase against the backdrop of a large grouping of health sector trade unions resorting to trade union action in a bid to secure Rs 35,000 DAT (Disturbance, Availability and Transport) allowance granted to doctors.

Cumaratunga said: “How could CBSL employees receive over 70 percent salary increase while the Finance Ministry repeatedly declared that health sector workers’ demands couldn’t be granted for want of funds. State Finance Ministers, Ranjith Siyambalapitiya and Shehan Semasinghe, both members of the SLPP should answer public concerns in this regard.”

Responding to another query, Cumaratunga said that he intended to raise the issue at hand in Parliament. “Let us all political parties represented in Parliament, civil society and the media take up this issue vigorously,” he said, claiming that salaries and allowances of a section of top officials had been increased by as much as Rs 600,000.

“This is not fair. Such actions cannot be justified under any circumstances,” the MP said. Referring to the 2024 budget, MP Cumaratunga said that public finance was in such a precarious situation, government servants were granted a salary increase on a staggered basis.

Having suspended debt repayment in April 2022, the country was yet to start paying its debt and there was no consensus with creditors, MP Cumaratunga said. Therefore, the CBSL, faulted along with others for the current crisis by the Supreme Court, couldn’t use the Central Bank of Sri Lanka (CBSL) Act, No. 16 of 2023 to its advantage, MP Cumaratunga added.

In terms of this Act, the Governing Board (GB) of the CBSL is responsible for overseeing the administration and management of the affairs of the CBSL and determination of the general policies of the CBSL.

The leader of the Yuthukama civil society organization pointed out in 2022, the CBSL employees had received a staggering 29.27 percent interest while the other EPF members received just 9 percent. “We took up this issue both in and out of Parliament though the government turned a blind eye to the unfair practice,” MP Cumaratunga said.  The civil society activist questioned how CBSL employees received special status when EPF, managed by the Central Bank, were entitled for 9 percent interest, MP Cumaratunga said, alleging that funds amounted to Rs 21 bn that could have used to provide additional assistance were held in a special account while EPF members struggled to make ends meet.

The government had allowed an unprecedented discrepancy in what he called beneficial interest rates received by members of the Central Bank Provident Fund, MP Cumaratunga said. According to him, in terms of the Domestic Debt Optimization (DDO) plan passed on July 01, 2023, the government legitimised the flawed EPF interest payment scheme. The MP said that the ruling SLPP voted for the controversial resolution that was adopted with a majority of 60 votes. The resolution received 122 votes in favour whereas 62 voted against. Forty-one MPs skipped the vote.

Much of the 10-hour debate, on July 1, 2023, centered on how the DDO process impacted on the EPF and ETF (Employees Trust Fund). Unfortunately, Parliament never really wanted to address the issue, a vast majority of EPF members being disadvantaged by the CB-managed EPF. That is the crux of the matter, MP Cumaratunga said.