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Ministers of Justice and Health on collision course with association of banks

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Wijeyadasa pushes for suspension of Parate executions:

‘Country paying heavy price for not having proper tax regime, favourable treatment to some’

By Shamindra Ferdinando

Justice, Prisons Affairs and Constitutional Reforms Minister Dr. Wijeyadasa Rajapakse, PC, has assured the local business community, troubled by parate executions, that laws will be brought in to regulate the practice. The Justice Minister said he would work with Health Minister Dr. Ramesh Pathirana to convince the Cabinet-of-Ministers to change the law.

 The assurance was given at a meeting held at the Jasmin Hall, BMICH, where the former President of the Bar Association explained how the law meant to recover unpaid loans and interest thereon was brazenly abused.

 The gathering was told that approximately 1,400 businesses were already in distress, especially in Colombo, due to the one-sided swift action taken by banks to recover unpaid loans by seizing and auctioning mortgaged properties without taking into consideration the political-economic-social crisis caused by the 2019 Easter Sunday attacks, followed by the Covid-19 pandemic and the subsequent economic crisis.

 Minister Rajapakse said that either the existing law, the Banking Act no 30 of 1988, had to be overhauled or a new Act introduced to prevent the further deterioration of the economy.

 Parate execution can be carried out only by the licensed commercial banks of Sri Lanka.

Following Dr. Rajapakse’s declaration, the Sri Lanka Banks Association (SLBA) stressed that the banks exercised what the Association called their legally-enshrined right to parate execution as a last resort. The Association declared that the overarching objective was to protect depositors’ funds that had been lent to borrowers.

 The Association emphasised that the parate execution remedy is aimed at recovering mortgaged assets from willful defaulters and businesses that were no longer viable.

 The SLBA, which represents all the licensed banks in the country, pointed out that banks have extended moratoriums on debt repayment for a long period exceeding 48 months in some cases, and that in instances of willful default by borrowers, the banks owe a duty to their depositors’ whose funds are at risk, to recover the debts overdue and minimize the losses on loans granted.

Legal sources pointed out that the association never bothered to issue statements when huge amounts of money recklessly lent and overdue from top end borrowers were written off as bad debts.

 Minister Rajapakse told Friday’s meeting that before the change of government, in 1977, only the Bank of Ceylon, People’s Bank and State Mortgage and Investment Bank were empowered to carry out parate executions. However, subsequently private banks and financial institutions, having made representations to the then President, secured parliamentary approval to join the club.

 The government disregarded the concerns expressed by the Bar Association at that time, the Justice Minister said, alleging there had been many instances of misuse at the expense of the clients experiencing financial difficulties.

 Valuable properties that had been seized under parate execution  had been bought for a song and then sold keeping a huge profit margin, the Justice Minister said, asserting that a deeply flawed law caused injustice.

 Dr. Rajapakse warned unless the continuing manipulation of the law wasn’t stopped through an amendment to the existing Act or by introducing a new Act, the banks, too, would have to face far reaching consequences. The significant depletion of industrial and commercial borrowers under the dire current circumstances and significant weakening of the client base as a whole could have a negative impact on the entire banking system, the Justice Minister warned.

 The President’s Counsel also questioned ‘irrevocable power of attorney’ that lenders obtain from borrowers over mortgaged properties while declaring his intention to bring in necessary amendments to restore public confidence in the system. The Minister pointed out that the ‘irrevocable power of attorney’ couldn’t be done away with. “This is wrong and not practiced anywhere in the world,” the outspoken Minister said.

 The government couldn’t forget that a section of the business community had been subjected to such unfair practices at a time the people were burdened with taxes and faced further increased levies, such as VAT from January 1, 2024. How could one do business under such difficult circumstances, the Dr. Rajapakse asked?

 The MP, who had first entered Parliament, back in 2004, on the then PA National List, found fault with successive governments for failing to adopt a proper tax policy. Declaring that once adopted a particular tax regime should be in place for at least a decade, lawmaker Rajapakse pointed out how the country suffered for want of proper tax strategy.

 The Minister told The Island that the way governments had handled the economy was questionable and those responsible owed the country an explanation and apology. Dr. Rajapakse questioned the utter failure on the part of the Central Bank to recover the loans granted to various failed finance companies. “I raised this issue in Parliament recently but unfortunately those responsible are yet to take tangible measures in this regard,” Dr. Rajapakse said.

 Referring to a declaration he made in Parliament on November 15, this year, Dr. Rajapakse said that Mercantile Credit, one of the beneficiaries of government grants, was yet to pay back Rs. 30,000 million it owed to the Central Bank.

 The Minister said so during the debate on the Second Reading of Budget 2024.

 “It is a massive borrowing by a single entity that is more than what his Ministry’s vote amounts to,” Dr. Rajapakse said. Those behind the scheme hadn’t been punished, the Minister charged.



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Advisory for Severe Lightning issued for Galle, Matara, Kaluthara and Rathnapura districts

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Advisory for Severe Lightning Issued by the Natural Hazards Early Warning Centre Issued at 12.30 p.m. 21 March 2026, valid for the period until 11.00 p.m. 21 March 2026

Thundershowers accompanied with severe lightning are likely to occur at some places in the Galle, Matara, Kaluthara and Rathnapura districts after 1.00 p.m.

There may be temporary localized strong winds during thundershowers. General public is kindly requested to take adequate precautions to minimize damages caused by lightning activity.

ACTION REQUIRED:

The Department of Meteorology advises that people should:

 Seek shelter, preferably indoors and never under trees.

 Avoid open areas such as paddy fields, tea plantations and open water bodies during thunderstorms.

 Avoid using wired telephones and connected electric appliances during thunderstorms.

 Avoid using open vehicles, such as bicycles, tractors and boats etc.

 Beware of fallen trees and power lines.

 For emergency assistance contact the local disaster management authorities.

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Sri Lanka says it denied US request to land two aircraft at Mattala airport

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Sri Lanka’s president says his government turned down a request from the United States to land two US combat aircraft at a civilian airport earlier this month.

President Anura Kumara Dissanayake told Sri Lanka’s parliament on Friday that Washington had requested permission for the aircraft to land at Mattala Rajapaksa International Airport in southern Sri Lanka from March 4 to 8.

The request was made on February 26, two days before the US and Israel launched their military offensive against Iran.

“They wanted to bring two warplanes armed with eight antiship missiles from a base in Djibouti”, Dissanayake told lawmakers. “We turned down the request to maintain Sri Lanka’s neutrality”, he added to applause.

The US-Israeli war on Iran has sparked widespread concern globally, as Iranian missile and drone attacks across the wider Middle East have sent energy prices soaring and fuelled fears of a widening conflict.

US President Donald Trump has also been pressuring Washington’s allies to show more support for the war, slamming NATO countries as “cowards” for refusing to help secure the Strait of Hormuz.

Iran has essentially shuttered the critical Gulf waterway  amid the war, forcing leaders around the world to scramble to try to offset the effects on their economies and energy supplies.

Amid the turmoil, many countries have refused to get directly involved in the war while calling for urgent de-escalation.

On Friday, Switzerland announced that it would halt any weapons exports to the US that could be used in military operations against Iran, citing its longstanding policy of neutrality.

“The export of war materiel to countries involved ⁠in the international armed conflict with Iran cannot be authorised for the duration of the conflict”, the Swiss government said.

Sri Lanka’s president also cited his country’s neutrality in the decision to deny the US request to land the two aircraft at Matalla airport earlier this month.

Dissanayake said he had received another request that same day, on February 26, from Iran to seek permission for three naval vessels to make a goodwill visit to Sri Lanka.

“With two requests before us, the decision was clear,” he said, noting that the government denied both to avoid taking sides as signs of escalating conflict emerged.

“Had we said ‘yes’ to Iran, we would have had to say ‘yes’ to the US, as well”, Dissanayake added.

In early March, Sri Lanka’s navy rescued 32 Iranian crew off IRIS Dena after it was torpedoed by a US submarine off the country’s coast, killing at least 84 people.

Days later, Sri Lanka evacuated more than 200 crew members from a second Iranian vessel, IRIS Bushehr, after the ship requested assistance from Colombo.

[Aljazeera]

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President maintains Lanka has been even-handed in dealing with Iran and US

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Sri Lanka refused the request by three Iranian ships to come to Sri Lanka on a goodwill visit and the request by the United States to land two of its fighter jets  in Mattala, President Anura Kumara Dissanayake told Parliament yesterday.

“Sri Lanka maintained neutrality by refusing the two requests by both the US and Iran,” he said.

President Dissanayake provided a clarification on domestic fuel prices in light of rising crude oil prices in the global market and subsequent fuel price increases in other countries, triggered by the ongoing crisis in the Middle East.

The President highlighted that the Ceylon Petroleum Corporation (CPC) currently supplies 57% of the country’s fuel requirements, while the remaining 43% is supplied by the private sector.

He further noted that private sector suppliers have requested pricing that reflects current global market rates for the fuel they import.

Accordingly, the President emphasised that a decisive decision on fuel price adjustments must be reached as expeditiously as possible to ensure the continuity of the national fuel supply.

Addressing the Parliament, the President stated that the current pricing formula dictates that for every one-dollar increase in global oil prices, domestic fuel prices must rise by Rs. 2.

He noted that the primary impact being faced is driven by the surge in global fuel prices rather than the depreciation of the rupee against the US dollar.

The President said that, globally, countries have been compelled to make difficult decisions regarding fuel costs, with price increases ranging from approximately 6% to 50%.

He added that while global prices have risen by as much as 49%, the domestic increase has been limited to 8%.

He further stated that Sri Lanka is currently facing a significant challenge in maintaining fuel supply.

The Ceylon Petroleum Corporation (CPC) accounts for 57% of the country’s fuel supply. He noted that had the CPC been the sole supplier, fluctuations could have been managed by offsetting current losses with future profits.

However, he said the private sector now controls 43% of the market, and their position is that if retail prices do not reflect the current landed cost of fuel, they will cease imports.

He added that, from a business perspective, this is a valid concern, as private companies reportedly incur a loss of approximately USD 55 million per shipment, which he said is unsustainable.

The President emphasised that the contribution of the private sector is essential to maintaining the national fuel supply, but noted that they will only participate if they are able to sell at cost-reflective prices.

He stressed that the issue of fuel pricing must, therefore, be addressed urgently.

He also pointed out that under the existing Act, companies are permitted to increase prices; however, the maximum retail price is determined by the Ceylon Petroleum Corporation.

“Although we have entered into agreements with these private companies, the necessary legislative amendments to the Act have not yet been finalised,” he noted.

Regarding government revenue, the President stated that tax income from fuel currently stands at Rs. 20 billion, compared to Rs. 240 billion generated last year from taxes on diesel.

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