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

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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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AKD pledges new constitution, provincial polls, commission on discrimination

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ECONOMYNEXT —A National People’s Power (NPP) government will hold a referendum on a new constitution, hold the delayed provincial council and local government polls within a year, and appoint a commission to investigate discrimination,  NPP leader Anura Kumara Dissanayake said.

Speaking at a rally in Jaffna on Thursday September 05, Dissanayake said an NPP administration will draft a new constitution on the premise of equality, democracy and participatory governance as one country, picking up where the 2015-2019 administration left off.

“A lot of southern politicians try to make deals with the people of north. They say ‘Vote for us; we’ll give you the 13th amendment or 13 or land powers’. How long have they been doing this?  I’m not here for that. If I came to make a deal with you, you might say 13 is not enough, give us plus. My first intention is to build a government that has won the confidence of both the north and the south,” he said.

“Governments in our country were formed against the ‘other’. Governments in the south were formed against the north. Sinhala governments were formed against Tamil people. My first objective is to change this politics of opposition to the other,” he added.

Dissanayake said that there has been a need for a new constitution in Sri Lanka for a long time.

“In 2000 a new constitution was drafted. Ranil Wickremesinghe and co set fire to it in parliament and put an end to that. There was conversation again about the constitution between 2015 and 2019, but there was no conclusion,” he said.

The NPP leader said the NPP plans to “rapidly conclude the process that began in  2015-2019” and draft a new constitution based on equality and democracy and where everyone can participate in governance as one country. The draft constitution will seek to “devolve power politically and administratively to every local government body, district and province and guarantee the political participation of every ethnicity”.

“We have presented a proposal for a new constitution. A summary of that proposal has been given to you. We will get this constitution approved at a referendum in a very short time and make it Sri Lanka’s main law,” he said.

Dissanayake noted that provincial council elections haven’t been held in six years and local govt elections have been delayed by two years.

“These elections which have been postponed indefinitely will be held within a year and people’s opportunity to participate in governance will be affirmed,” he said.

An NPP government will also appoint a commission empowered to take legal action against discrimination, he said.

“There are Sinhalese, Tamils and Muslims in this country. There are Buddhists, Hindus, Christians and Muslims. There are those who speak Sinhala and Tamil languages. There’s a diverse set of communities. Until racism is completely ended, there is a danger of some uncertainties among these groups, of being discriminated against. We will appoint a commission that has the power to take legal action against discrimination. People can complain to this commission of any instances of discrimination,” he said.

Claiming that an NPP victory at the September 21 presidential election is a sure thing, Dissanayake urged Tamils in the north to be a part of that victory and not to stand in opposition to it.

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Governor Muzammil resigns, pledges support to Sajith

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A J M Muzammil

By SHIHAR ANEEZ

ECONOMYNEXT –Uva Provincial Governor A J M Muzammil resigned his post as the representative of the country’s President and pledged his support to opposition leader Sajith Premadasa, sources said.His resignation and backing to Premadasa come 16 days ahead of the presidential poll scheduled for September 21.

Analysts see no presidential candidate winning 50 percent in the poll.

Muzammil was appointed as the Governor of the Uva province in August 2020 by the previous Sri Lankan leader Gotabaya Rajapaksa.

The 75-year old former Mayor of the Colombo Municipal Council (CMC) continued as the governor under the current President Ranil Wickremesinghe after Rajapaksa fled the country and resigned in July 2022 amid mass protests and economic crisis.

“I hereby record my disappointment in certain Governors who have been vociferously campaigning for various Presidential Candidates whilst holding the office of Governor,” Muzammil said in his resignation letter to President Wickremesinghe.

“I wish to inform Your Excellency that, after my resignation, I intend to support Presidential Candidate Hon. Sajith Premadasa.”

Before his resignation, he met Santosh Jha, Indian High Commissioner to Sri Lanka at India House, the official residence of the Indian High Commissioner.

“The meeting was facilitated at the request of the Governor,” an Indian High Commission official told EconomyNext.

“It is one of the regular meetings on political dialogue and bilateral relations,” the official said, adding that India has nothing to do with Muzammil’s resignation and his pledge to back Premadasa.

Muzammil has switched his political alliance in the past to cross ruling parties befor being appointed to plum posts.

The latest backing by Muzammil for opposition leader Premadasa comes four days after Sri Lanka’s main Tamil party Illankai Tamil Arasu Kachchi (ITAK) decided to support him at the upcoming Presidential Election.

The ITAK’s decision came after its meeting with India’a National Security Advisor Ajit Doval last week.

The Sunday Times reported that Doval during the meeting has said that the Tamil legislators should not “waste the votes of the Tamil people” and try to negotiate with a candidate who could win and secure the aspirations of the Tamil people through talks.

India has not openly pledged its support to any presidential candidates. Doval during his visit met top four candidates: President Wickremesinghe, Premadasa, Marxists Janatha Vimukthi Peramuna leader Anura Kumara Dissanayaka, and former President Mahinda Rajapaksa’s son, Namal.

India had been long negotiating for some renewable power plants, land connectivity, port deals, and energy pipe connectivity with Sri Lanka, but many of them have yet to be signed under Rajapaksa and Wickremesinghe.India has also raised concerns over Chinese vessels being allowed to do research in the sea bed citing security issues for the Indian Ocean region.

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ComBank announces special concessions on foreign university payments

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The Commercial Bank of Ceylon has announced a series of attractive concessions for students making payments to foreign universities in the next three months.

The Bank said it would slash the initial telegraphic transfer (TT) charges by half for Sri Lankans opening new student files before 30 th November 2024, and reduce the interest rate by 0.5% for educational loans obtained before that date.

Students that choose Commercial Bank as their partner for overseas education payments would also be provided a UnionPay international debit card free of charge for hassle-free payments in their overseas destinations as part of this special promotion, the Bank said.

Additionally, such students would benefit from simplified and expedited procedures and the Bank’s strong network of international correspondent banks.

The Bank said it was perfectly positioned to provide simple, borderless transfers of funds, making it the ideal partner to facilitate overseas education.

One of the Bank’s payment card partners, UnionPay International (UPI) has enabled card acceptance in 181 countries and regions in partnership with more than 2,500 institutions worldwide, and provides high quality, cost effective and secure cross-border payment services to the world's largest cardholder base.

Commercial Bank offers education loan facilities with flexible terms, for both employed and unemployed students who are pursuing local and foreign education. These loans come with a longer repayment period and attractive interest rates. Additionally, students are eligible to enjoy a grace period of two years to service only the interest, before commencing the capital repayments of the loan facility.

Commercial Bank is the largest private sector bank in Sri Lanka and the first Sri Lankan bank to be listed among the Top 1000 Banks of the World. The Bank is a leader in digital innovation in the country’s banking sector, operates a strategically-located network of branches and 966 automated machines island-wide, and has the widest international footprint among Sri Lankan banks, with 20 outlets in Bangladesh, a microfinance company in Myanmar, and a fully-fledged Tier I bank in the Maldives.

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