Wither Central Bank
Posted on November 19th, 2015

Hitihamillage Chandrapala.

The Central Bank of Sri Lanka has been maintaining a clean sheet of record until very recent times. Every one respected the Central Bank for its unique role and integrity in managing the monetary system of the country. As the custodian of the Employees’ Provident Fund, the biggest superannuation fund in the country, it has an unblemished record. The functions relating to the administration of the Exchange Control Act and the management of the foreign exchange of the country have been imparted without any complain. The respective governments also honoured its role and did not try to get it politically involved. Even the officers of the Central were given their due respect.

Unfortunately there have been attempts to tarnish its reputation in recent times. There was lot of criticism leveled against the appointment of Ajith Neward Cabral because of his political background. However, subsequent events show that his appointment was justified to a considerable extent as he was able to survive in his position without any conflict. The most suitable choice would have been Dr.P.B.Jayasundera with his expertise on the subject of fiscal policy and his excellent career record at the Central Bank. However, at this time he had become an indispensable person at the Finance Ministry and Mahinda Rajapaksa was unable to release him for the post of Governor, Central Bank.  By virtue of his position as the Secretary to the Ministry of Finance who is invariably an ex-officio member of the Monetary Board that governs the Central Bank, Dr.P.Jayasundera was in a position to guide the activities of the Monetary Board and protect the interest of the Government. Because of this combination, the Central Bank was able to maintain its integrity.

However, this situation took a complete turnaround with the appointment of Arjun Mahendran as the Governor of the Central Bank under Yahapalana Government. The only qualification he had to become the Governor of the Central Bank was his close family connection with Ranil Wickramasinghe and his Royal background. He has also become a citizen of Singapore after he left Sri Lanka a long time ago. As such, lot of ambiguity surrounds his appointment. Immediately after his appointment he was directly involved in the controversial bond issue of a fraudulent nature running to billions of Sri Lanka Rupees. The beneficiary of this bond issue happened to be Capital Treasuries owned by his son in law. Despite legal actions initiated and debates ensued in the Parliament and in public forums, nothing appears to have happened under the dictatorial rule of Ranil Wickramasinghe as in the past. Even the SLFP Ministers who boasted about making it a condition to get him out of the Central Bank when they joined the coalition government appear to have knelt in front of Ranil Wickramasinghe. The President himself is unable to do anything as he is a mere puppet in the hands of Ranil Wickremasinghe. Under such circumstances, Arjun Mahendran was able to fortify himself well in the Central Bank and was able to vent his revenge on the Central Bank Officers by transferring them all over at his whims and fancies even without consulting the Department of Human Resources. This action has brought down the morale of the Central Bank officers to rock bottom levels. In the absence of a Secretary to the Treasury in the caliber of Dr.P.B.Jayasundera, there is no one to control Arjun Mahendran who is acting like a bull in a China shop. Both Arjun Mahendran and Ranil Wickremasinghe represent the right wing Capitalist sector of the Western style who strongly believe in private management and are very likely to take Employees’ Provident Fund and the Exchange Control Department out of the Central Bank as announced in their medium term plan and hand them over to a private company. Such arrangements are necessary for them to earn money for their survival and election campaigns as in the case of the bond issue. I as a citizen feel very sorry for the Central Bank and its future.

2 Responses to “Wither Central Bank”

  1. Fran Diaz Says:

    It was the Central Bank that was targetted by the LTTE too. Again, it is the Central Bank targetted now by Arjun Mahendran, who was appointed by Exec PM Ranil W. who was appointed by Pres Sirisena. Pres Sirisena said when he appointed Ranil as Exec PM “the West wants it so”.

    Another Mahendran, Killi Mahendran, imported container loads of Glyphosate, the now banned weedkiller. Where is the stock of Glyphosate already in the country ?
    Lanka’s present GoSL is NOT a National Govt. It is a scared and silent govt. ?

    * Since 500 yrs ago after Colonial rule, was Sri Lanka ever free of foreign rule ?
    * Was Sri Lanka ever Independent after 1948 ?
    * Is Sri Lanka a Democracy ?

  2. Fran Diaz Says:

    Can someone tell us how the retirement funds of MPs are invested ?
    Do these funds fall into the same lot as for the other govt employees and private sector employees ?

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