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Banks in crisis due to govt. hoodwinking country on local debt restructuring, says Udaya
The government had agreed to restructure domestic debt after it signed the staff level agreement with IMF representatives, Pivithuru Hela Urumaya (PHU) leader, MP Udaya Gammanpila, said on Thursday, addressing the media in Colombo.
“When the government entered into discussions with the IMF, it insisted that it wouldn’t restructure domestic debt. We were told that the staff-level agreement, signed in September 2022, had no reference to domestic debt restructuring. But now the government insists that restructuring domestic debt is a precondition to restructure foreign debt. We were not shown the staff-level agreement, even though the government insisted that all documents with the IMF had been presented to Parliament. Why is this document still a secret? According to our sources, the government has agreed to restructure domestic debt, after it signed the staff-level agreement,” he said.
Gammanpila said that the document, the government presented to Parliament, was not the staff-level agreement. However, even that had vague references to restructuring domestic debt.
“Page 17 of the document given to us has this phrase: ‘The authorities and their financial advisors are weighing different options and their associated legal procedures to optimise the design of a Local Law Local Currency debt treatment while preserving financial stability.’ Instead of the word ‘restructure’, they use the word ‘optimise.’ Whom are they trying to fool? Now, all the bankers are freaking out because they don’t know how the government will go about restructuring domestic debt. They have not been consulted or their concerns noted,” he said.
The PHU leader said that local commercial banks had given large loans to the government. From 2019, the banking sector has been facing continuous crises, he said.
“A number of moratoriums were given. Due to the economic crisis, there are a lot of non-performing loans, too. According to the IMF, the loans given by commercial banks to the government is about 40 percent of total banking assets. Everything hangs in the balance. It would be ideal if the government could avoid restructuring domestic debt. But if it must, it must only be done following a serious discussion with all stakeholders,’ he said. (RK)
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Landslide RED warnings continue to be in force for the Districts of Kandy, Kegalle, Kurunegala, Matale and Nuwara Eliya
The RED Landslide Early Warnings issued by the Landslide Early Warning Center of the National Building Research Organization [NBRO] to the Districts of Kandy, Kegalle, Kurunegala, Matale and Nuwara Eliya have been extended until 1600hrs today [06th December 2025]. Landslide Early warnings have also been issued to the districts of Badulla, Colombo, Galle, Gampaha, Kalutara, Matara, Monaragala and Ratnapura,
Accordingly,
LEVEL III RED warnings have been issued to the Divisional Secretaries Divisions and surrounding areas of Gangawata Korale, Deltota, Doluwa, Thumpane, Medadumbara, Minipe, Pathahewaheta, Yatinuwara, Ganga Ihala Korale, Akurana, Udunuwara, Panvila, Pathadumbara, Kundasale, Pasbage Korale, Hatharaliyadda, Ududumbara, Poojapitiya, Harispattuwa and Udapalatha in the Kandy district, Galigamuwa, Kegalle, Mawanella, Rambukkana, Dehiowita, Warakapola, Deraniyagala, Bulathkohupitiya, Ruwanwella, Yatiyanthota and Aranayaka in the Kegalle district, Narammala, Mawathagama, Mallawapitiya, Alawwa, Rideegama and Polgahawela in the Kurunegala district, Rattota, Wilgamuwa, Ukuwela, Pallepola, Matale, Laggala Pallegama, Yatawatta, Naula and Ambanganga Korale in the Matale district, and Nildandahinna, Walapane, Hanguranketha and Mathurata in the Nuwara Eliya district.
LEVEL II AMBER warnings have been issued to the Divisional Secretaries Divisions and surrounding areas of Uva Paranagama, Kandeketiya, Bandarawela, Soranathota, Hali_Ela, Meegahakivula, Badulla, Ella, Haputhale, Lunugala, Welimada, Passara and Haldummulla in the Badulla district, Nuwara Eliya, Ambagamuwa Korale, Thalawakele, Norwood, Kothmale West and Kothmale East in the Nuwara Eliya district, and Kahawaththa, Godakawela and Kolonna in the Ratnapura district.
LEVEL I YELLOW warnings have been issued to the Divisional Secretaries Divisions and surrounding areas of Padukka and Seethawaka in the Colombo district, Elpitiya and Yakkalamulla in the Galle district, Mirigama, Attanagalla and Divulapitiya in the Gampaha district, Bulathsinhala, Ingiriya and Horana in the Kalutara district, Athuraliya and Pasgoda in the Matara district, Bibile and Medagama in the Monaragala district, and Kiriella, Nivithigala, Eheliyagoda, Kuruwita, Kalawana, Pelmadulla, Elapatha, Balangoda, Openayake, Imbulpe, Ayagama, Ratnapura and Kaltota in the Ratnapura district.
The International Monetary Fund (IMF), on Thursday, signalled strong solidarity with Sri Lanka in the wake of Cyclone Ditwah, confirming that it is actively exploring options to provide further support for recovery and resilience beyond the existing Extended Fund Facility (EFF).
Julie Kozack, Director of the IMF’s Communications Department, opened her remarks with heartfelt condolences:
“Our deepest sympathies go out to the people of Sri Lanka for the effects of the devastating cyclone. Our hearts mourn the loss of life that has taken place,” she said, extending condolences to other Asian nations also grappling with severe flooding, including Indonesia, Malaysia, Thailand, and Vietnam.
On Sri Lanka, Kozack emphasised that the IMF is closely engaging with authorities, development partners, and counterparts to assess the humanitarian, social, and economic toll of the disaster.
“Large parts of Sri Lanka have been affected by floods, and we expect economic activity to be adversely impacted, in addition to the significant human toll,” she noted.
The IMF is awaiting the completion of a rapid post-disaster damage assessment, led by Sri Lankan authorities, in collaboration with international partners, to better gauge the economic impact.
“We are continuing to support Sri Lanka’s recovery, reform, and resilience under the EFF arrangement. Our staff is looking into options to further support Sri Lanka in the recovery process,” Kozack confirmed.
She reiterated that the Board meeting, scheduled for 15 December, remains on track, following the staff-level agreement on the fifth review reached in October—prior to the cyclone.
“We will provide additional details as the assessment of economic needs and damages moves forward, and as we have more information to inform our thinking around the options,” she added.
Naina Thambi Marikkar Mohamed Thahir was sworn in as a Samagi Jana Balawegaya (SJB) National List Member of Parliament before Speaker Dr. Jagath Wickramaratne yesterday (05).
His appointment follows the resignation of SJB Parliamentarian Muhammathu Ismail Muththu Mohamed, who stepped down from his position on 28 November.
The SJB subsequently nominated Thahir to fill the resulting vacancy.
Accordingly, the Election Commission issued a Gazette Extraordinary declaring Naina Thambi Marikkar Mohamed Thahir a Member of Parliament, in terms of Section 64(5) of the Parliamentary Elections Act, No. 1 of 1981, as amended by Section 6 of the Elections (Special Provisions) Act, No. 35 of 1988.
With the issuance of the gazette, and the subsequent swearing-in, Thahir has officially assumed duties as a National List MP, representing the SJB.
Landslide RED warnings continue to be in force for the Districts of Kandy, Kegalle, Kurunegala, Matale and Nuwara Eliya
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Marrikkar Mohamed Thahir takes oath as SJB National List MP
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