The Monetary Board of the Central Bank of Sri Lanka (Monetary Board) has decided to cause Director, Supervision of Non-Bank Financial Institutions to make an application to a competent court for the winding up of ETI Finance Limited (ETIF), in terms of Section 31(5)(b) of the Finance Business Act, No. 42 of 2011 (FBA).
Due to the various irregularities taken place since 2011 and inability of the Board of Directors and the Senior Management of ETIF to address the resultant issues, the Monetary Board on 02nd January 2018, issued Directions to the directors of the Company and appointed a Panel of Management to oversee the affairs of the Company.
Even though the Monetary Board directed the Board of Directors of ETIF to bring suitable investor(s) to revive the Company, no viable investment proposal was available and financial condition of the Company continued to deteriorate. In the meantime, 30% of ETIF deposits was repaid in 2018 and 2019.
Having considered the continuously deteriorating financial condition and non-availability of a viable revival plan, the Monetary Board decided to suspend the business of ETIF in terms of the Section 31(1) of FBA with effect from 13th July 2020.
During the period of suspension, payment of compensation for the insured depositors under the Sri Lanka Deposit Insurance and Liquidity Support Scheme (SLDILSS) was commenced through the island wide branches of the People’s Bank. By end 2020, a sum of Rs. 8,941.6 mn has been paid for 65% of the insured depositors out of the total of 37,586, up to a maximum of Rs. 600,000/- per insured depositor. Such amount covers 99.9% of the Rs. 8,955.4 mn of eligible compensation under SLDILSS. Even though, the recovery of loans continued during the suspension period, there was no considerable amount recovered by the Company.
Having considered the non-availability of a viable plan to revive the Company through a capital infusion and the continuing insolvent position, the Monetary Board decided to cause Director, Supervision of Non-Bank Financial Institutions to make an application to a competent court for the winding up of ETIF in terms of Section 31(5)(b) of the FBA. The Panel of Management shall continue to manage the affairs of ETIF and facilitate the winding up process.
Cabraal comments on exchange rate flexibility
Mr. Ajith Nivard Cabraal, twice Central Bank Governor and former State Minister for Finance, issued the following media statement last week on exchange rate flexibility.
“The decision to allow the Sri Lankan Rupee (LKR) to be “flexible” from March 7, 2022 onwards is sometimes described by certain persons as being a “unilateral” decision of then Governor Ajith Nivard Cabraal. Therefore, this statement is to provide the factual position so as to set the record straight.”The decision to allow flexibility in the exchange rate was taken by the Monetary Board of the Central Bank of Sri Lanka based on a Monetary Board Paper dated March 7, 2022 submitted by all three Deputy Governors (Mr Mahinda Siriwardene, Mr Dammika Nanayakkara & Mrs Yvette Fernando), Director – Economic Research Department and Director – International Operations Department.
“The Board Paper stressed the need for changing the exchange rate policy immediately in order that the exchange rate acts as a “shock absorber” in the face of adverse developments in the global front on Sri Lanka’s already fragile Balance of Payments, including the increase of the crude oil price to nearly USD 140 per barrel and the worsening Russia-Ukraine war.
“Based on that Board Paper and the discussion at the meeting, the Monetary Board decided to ‘allow the market to have a greater flexibility in the exchange rate with immediate effect and communicate that the Central Bank is of the view that forex transactions would take place at levels which are not more than Rs. 230 per US dollar.’
“From the above it will be clear that, while the Monetary Board had expressed its ‘view’ as to the level at which forex transactions would take place as a market guidance, a clear decision had been taken to allow for the flexibility of the LKR in the forex market. On the same day, a statement was issued to the media in line with the above decision.
“Further, within about a week of floating the LKR, the President made a formal announcement that the government had initiated discussions with the International Monetary Fund (IMF) for a programme.
“Subsequently, Governor Cabraal resigned on April 4, 2022, on which day, the LKR was trading at Rs. 289.73/299.99 per USD in accordance with the new ‘flexible’ exchange rate policy as announced by the Monetary Board. After Governor Cabraal’s exit, the Monetary Board chaired by the new Governor Dr. Weerasinghe continued with the ‘flexible’ exchange rate policy, whist the Government and CBSL also took a series of far reaching decisions which included the decisions to: sharply increase policy interest rates by 700 bps from April 8, 2022 onwards, and to discontinue repayments of forex loans and interest from April 12, 2022 onwards.
“In the meantime, the LKR continued to depreciate to a range of Rs. 364.23/377.50 against the USD by May 12, 2022, at which point, the Monetary Board had apparently once again decided to ‘fix’ the exchange rate at a new range between Rs.355.00/Rs.365.00 per USD. Such move to ‘fix’ the exchange rate seems quite similar to the policy adopted by the Monetary Board chaired by Governor Professor W D Lakshman which ‘fixed’ the LKR exchange rate at a range of Rs.199.00/203.00 per USD from September 6, 2021 onwards.
“It must of course be understood that there will always be conflicting opinions among stakeholders as to the value, timing and methodology to be followed in ‘fixing’, or ‘floating’ or ‘pegging’ a country’s currency. It is also quite possible that after decisions are taken to ‘float,’ ‘fix’ or ‘peg’ the currency, others could, claim that the decision was right or wrong or implemented differently.
“However, it must be appreciated that the decision-making authority has to take its decision based on the prevailing circumstances, expert advice, practical ground conditions, judgment of future expectations and outcomes, etc. when viewed holistically. That is obviously why the Monetary Law Act provides the authority to the Monetary Board to change financial and monetary sector policies (including the exchange rate policy, interest rates, statutory reserve ratios, etc) when it deems appropriate to do so, from time to time.
“It must also be appreciated that the implementation of policy measures is carried out by the professional and technical staff, of the Central Bank and they would naturally ensure that the policy measures being implemented are based on legal and binding decisions of the Monetary Board, which is the decision making authority, and not based on ‘unilateral’ decisions of a single person.”
Cathay Pacific releases its 2021 Sustainability Report
The Cathay Pacific Group has released its comprehensive annual Sustainable Development Report that addresses its commitment and progress in the areas of environmental, social and governance, which are of great importance to its stakeholders, and towards its goal of net-zero carbon emissions by 2050.
Regional General Manager, South Asia Middle East and Africa (SAMEA), Rakesh Raicar said: “We continue to ramp up our efforts to fight climate change and have made specific tangible progress towards supporting and prioritizing our sustainability issues which are communicated in our 2021 Sustainable Development Report. This includes supporting our communities in India by transporting essential aid during this global health crisis, and making new commitments towards the use of Sustainable Aviation Fuel (SAF) in our operations. We are certain, together with our partners and customers, we will continue to positively contribute to the environment and communities, and also connect Hong Kong to the world in sustainable ways as recovery accelerates.”
Some highlights from the 2021 report include:
• Helping to deliver vaccinations around the world: We raced against time to develop a dedicated Vaccine Solution to make COVID-19 vaccines available to global communities. In 2021, over 165 million vaccine doses along with other essential medical supplies were delivered to Hong Kong and beyond by our airlines.
• Making progress towards carbon neutrality: We became one of the first airlines in Asia to target 10% SAF use by 2030 and have committed to purchasing more than 350 million gallons of SAF beginning from 2024 alongside our Oneworld Alliance peers. We also co-founded the Aviation Climate Taskforce, an industry platform through which we will accelerate the development of breakthrough technologies that will help drive the decarbonisation of civil aviation. We also developed Asia’s first major Corporate SAF Program in 2021, which came to fruition in April this year with the launch of its pilot phase, bringing SAF into Hong Kong International Airport for uplift for the very first time.
Strong commitment to diversity: We have pledged to increase female representation at senior positions by 25% – reaching 30% in total – by 2025. To drive changes, a Diversity and Inclusion (D&I) Steering Committee and a dedicated team were set up in 2021.
TDL Logistics bags Bronze at National Logistics Awards
TDL Logistics Pvt. Ltd. won the Bronze Award in the Freight Forwarders and Logistics Category at the National Logistics Awards. TDL Logistics Pvt. Ltd. was established in October 2010 by Tony De Livera, along with a group of professionals in freight forwarding and logistics. TDLL has since established itself as a premier, service-oriented, international freight and logistics company with a special emphasis on the wearing apparel industry worldwide. The organisation is poised for exciting developments, such as enhancement of their network coverage, internationalization of the business and the formulation of strategic partnerships, with their prime expectation being to have rapid growth, with a strong agency network globally.
“This award further reflects the confidence of our customers in the quality of our services. I would say this is a collective achievement of our Company’s most dedicated employees at all levels. Winning an award at the first ever National Logistics Awards Ceremony is a great honour and a source of pride for me. Especially during these challenging times. As a result, I would like to thank SLFFA and fellow members for their continuous encouragement and support shown to our group and the TDLL Team, and I owe a very special thank you to all our colleagues for their hard-work and dedication over the years, that enabled us to win this award,” said Chairman of the Company Tony de Livera.
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