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T-Bill dealers make a killing while bank depositors earn a pittance

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by Sanath Nanyakkare

Primary dealers, including banks and other financial institutions that lend to the government through lending instruments, such as short-term Treasury Bills, stand to make a surplus profit of about 5.70% which is one of the highest in the history of Sri Lanka, The Island learns.

Surplus profit is made when these primary dealers profit from the prevailing interest pricing errors in the bank deposit rates and in the government securities market.

They invest in more liquid Treasury Bills which bring them an interest rate of 12.92% in just three months whereas an ordinary bank depositor earns an interest between 10-12% per annum.

This indicates a distortion in the money saving market especially against an inflation rate of 18%, analysts say.

Moreover, for the first time after more than five years, CBSL rejected all bids received at T-bond auction held on 29th March 2022 because higher interest rates were expected by market participants to compensate for galloping inflation and higher financing requirement of the government which normal depositors can never do.

Thus undersubscribed bill and bond auctions have increased Central Bank holdings of government securities to Rs. 1.7 trillion, data from the Public Debt Department reveals.

Sri Lanka recorded one of its highest inflation of 18.7% in March 2022 relative to 15.1% in February 2022 causing an alarm among the consumers in the country. Going forward, inflation is expected to remain high due to higher commodity prices and energy costs.

“Although lending rates have adjusted upwards, the adjustment in bank deposit interest rates remains sluggish, which has been inadequate to attract deposits into the banking system,” they said.

“The new Finance Minister will have to further hike interest rates at the next Monetary Policy Meeting to encourage banks and financial institutions to make the required adjustments to deposit rates in order to promote savings and to be fair by ordinary depositors,” they said.



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Government assures University community of support to rebuild Peradeniya stronger and safer

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Prime Minister Dr. Harini Amarasuriya stated that the Government stands ready to support the University of Peradeniya in rebuilding stronger, safer, and more resilient than before. She made these remarks while visiting the University of Peradeniya on Sunday  (07), where she met with student representatives and Heads of Departments affected by the sudden floods that swept through the campus on 27 November.

The visit aimed to personally inspect the damage, which caused extensive harm to academic buildings, student facilities, and key infrastructure. University officials briefed the Prime Minister on the severity of the impact, highlighting significant losses to the Faculties of Management, Agriculture, and Veterinary Medicine, as well as the IT Centre, CDCE, gymnasium, swimming pool, and playgrounds.

The Prime Minister was also briefed on how the disaster disrupted both academic activities and the wellbeing of students and staff, including the loss of more than 110 computers, vital laboratory equipment, examination documents, and four central IT servers, with preliminary damage estimates exceeding Rs. 6 billion. She commended the swift evacuation of nearly 750 students from hostels located along the Mahaweli River and acknowledged the resilience shown by nearly 11,000 students who remained on campus during the crisis.

She expressed her appreciation to the Sri Lanka Army, the Disaster Management Centre, and local donors for providing food, water, and essential supplies at a time when access and communication were severely disrupted.

A joint engineering team has confirmed that university buildings remain structurally stable, although several require urgent repairs. With academic activities suspended until 15 December.

The Prime Minister discussed with the Vice Chancellor and emergency response teams the immediate steps required to restore normalcy and provide necessary support to students whose studies and daily routines have been significantly affected.

During these discussions, the Prime Minister issued a series of directives focusing on both immediate relief and long-term safety. These include restoring essential services such as water, electricity, and safe access pathways for students; accelerating the rehabilitation of heavily damaged faculties and laboratories; strengthening early warning systems for flood-prone areas; and implementing long-term mitigation measures such as riverbank protection, improved drainage, and the relocation of vulnerable facilities. She also directed the relevant agencies to fast-track government assistance, assuring the university community that the Government stands ready to help Peradeniya rebuild stronger, safer, and more resilient than before.

The meeting was attended by  Nalaka Kaluwewa, Secretary to the Ministry of Education, Higher Education and Vocational Education; Kandy District Parliamentarian Thanura Dissanayake, Professor Terrence Madhujith, Vice Chancellor of the University of Peradeniya; and Professor R. W. Pallegama, Deputy Vice Chancellor of the University of Peradeniya, along with Heads of Departments, officials, and student representatives of the University of Peradeniya.

 

[Prime minister’s media division]

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Level III landslide early warnings issued to the Districts of Kandy, Kegalle, Kurunegala and Matale extended till 1600 hrs on Tuesday [09]

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The Level III RED landslide warnings issued to the districts of Kandy, Kegalle, Kurunegala and Matale by the landslide early warning center of the National Building Research Organisation [NBRO] have  been extended till 1600 hrs on 09th December 2025.

Accordingly,
The LEVEL III RED warnings issued to the Divisional Secretaries Divisions and surrounding areas of Hatharaliyadda, Yatinuwara, Ududumbara, Pathahewaheta, Medadumbara, Pasbage Korale, Deltota, Poojapitiya, Ganga Ihala Korale, Panvila, Gangawata Korale, Udapalatha, Harispattuwa, Kundasale, Minipe, Doluwa, Thumpane, Akurana, Udunuwara and Pathadumbara in the Kandy district, Kegalle, Galigamuwa, Mawanella, Bulathkohupitiya, Aranayaka, Yatiyanthota, Rambukkana and Warakapola in the Kegalle district, Mawathagama, Mallawapitiya and Rideegama in the Kurunegala district, and Naula, Wilgamuwa, Pallepola, Ambanganga Korale, Laggala Pallegama, Ukuwela, Rattota, Matale and Yatawatta in the Matale district have been extended.

In the meantime,

LEVEL II AMBER warnings have  been issued to the Divisional Secretaries Divisions and surrounding areas of Uva Paranagama, Meegahakivula, Badulla, Kandeketiya, Bandarawela, Soranathota, Hali_Ela, Ella, Lunugala, Welimada, Haputhale, Passara and Haldummulla in the Badulla district, Dehiowita, Ruwanwella and Deraniyagala in the Kegalle district, Alawwa and Polgahawela in the Kurunegala district, Ambagamuwa Korale, Hanguranketha, Mathurata, Norwood, Kothmale West, Nuwara Eliya, Thalawakele, Nildandahinna, Walapane and Kothmale East in the Nuwara Eliya district, and Kahawatta, Godakawela and Kolonne in the Ratnapura district.

LEVEL I YELLOW warnings have been issued to the Divisional Secretaries Divisions and surrounding areas of Yakkalamulla and Elpitiya in the Galle district, Attanagalla, Mirigama and Divulapitiya in the Gampaha district, Narammala in the Kurunegala district, and Eheliyagoda, Opanayake, Kalawana, Imbulpe, Kaltota, Kiriella, Kuruwita, Nivithigala, Ayagama, Pelmadulla, Balangoda, Elapatha and Ratnapura in the Ratnapura district

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President chairs Nuwara Eliya District Special Coordinating Committee Meeting

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A special District Coordinating Committee meeting, convened to review the damage caused to the agricultural sector in the Nuwara Eliya District due to Cyclone Ditwah and to discuss the urgent measures required, was held this morning (08) at the Nuwara Eliya District Secretariat. The meeting was chaired by President Anura Kumara Dissanayake, with the participation of the relevant responsible officials.

Due to adverse weather conditions, 1,421 hectares of vegetable cultivation in the Nuwara Eliya District has been damaged. President Anura Kumara Dissanayake instructed the relevant officials to take the necessary measures to provide compensation to farmers without delay.

Officials stated that although there has been crop damage, the reduction in the vegetable harvest in the Nuwara Eliya District would be around 25%. They added that Nuwara Eliya district would be able to meet the daily demand, but a decrease in the daily demand has been observed.

Officials further pointed out to the President that the reason for this decline is the spread of false information claiming a vegetable shortage in the Nuwara Eliya District and that prices have excessively increased.

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