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Banks in crisis due to govt. hoodwinking country on local debt restructuring, says Udaya

Published

3 years ago

2023/05/6

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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Formulation of a Draft Economic Development Bill to expedite the process of Digital Transformation and Digital Economic Development

Published

5 hours ago

2026/06/10

Priyan

It is essential to establish an institutional framework with legal powers to ensure the effective implementation of national digital policy and guidelines.

Quality human capital should be attracted to this institutional framework for the compilation of policies, implementation of policies, regulation, and empowerment of operations. The continuous participation of the private sector should also be considered in establishing a strong institutional framework.

It has been further identified that attention should also be
drawn to new fields of digital innovation, including support for artificial intelligence and related activities.

Taking into consideration the aforementioned matters, a concept paper has been formulated to prepare a Draft Economic Development Bill for the establishment of a new institutional framework.

Accordingly, the Cabinet of Ministers has approved the resolution furnished by the President in his capacity as the Minister of Digital Economy to instruct legal draftsman to formulate a Draft Economic Development Bill based on the aforementioned concept paper.

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Cabinet approval for Sri Lanka Community and Health Survey – 2026/2027

Published

5 hours ago

2026/06/10

Priyan

The Sri Lanka Community and Health Survey is the main data source for obtaining necessary information for reviewing progress toward achieving the national health development goals, as well as the expected sustainable development goals by 2030.

The last survey was conducted in the year 2016, and the Sri Lanka Community and Health Survey should be conducted to obtain updated data to enable the collection of related data and indicators concerning the health and well-being targets of the Global Sustainable Development Objectives.

Accordingly, the Cabinet of Ministers has approved the resolution furnished by the President in his capacity as the Minister of Finance, Planning, and Economic Development to take necessary steps to conduct the aforementioned survey.

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A National Water Tariff Policy for all Water Supply and Sanitation Services

Published

6 hours ago

2026/06/10

Priyan

The access to secure, reliable and affordable drinking water and adequate sanitation facilities is essential to maintain public health, promote social well-being and foster economic development.

The Sri Lankan Government recognizes water supply and sanitation services as both an economic good and a basic human need. Therefore, when pricing for water and sanitation, a balance should be maintained between the financial sustainability of the service providers and the requirement to ensure fair and affordable access for all strata in the society.

Accordingly, the Sri Lankan government has identified the necessity of a national water supply that is sensitive to gender equality and social integration applicable to all water supply and sanitation service providers. At present, there is no formal national framework for setting, reviewing, approving, and implementing tariffs for water supply systems operated by various water supply providers as well as for setting, reviewing, approving, and implementing tariffs for sanitation systems.

Therefore, the Ministry of Housing, Construction, and Water Supply has formulated a water tariff policy covering all water supply service providers under the Sri Lanka Water Supply and Sanitation Sector Reform Program, which is a policy-based loan program implemented under Asian Development Bank funds.