Financial Access

Aug 13, 2012 (LBO) – Sri Lanka’s efforts to establish banking services in the former war-torn areas included ‘laundering’ soiled money held by displaced persons, Central Bank governor Ajith Nivard Cabral told an international Defence conference in Colombo. “Banks at that time were set up in containers which were at various locations so that people could bring their money and open accounts,” Cabraal said.

“IDPs had come from various parts particularly through water and the cash they carried were so muddy and soiled we really had to do money laundering as well,” he quipped.

Sri Lanka’s military effectively crushed the separatist Tamil Tigers in May 2009 ending a three decade conflict hat had taken a toll on the island’s north and east.

During the final stages of the battle thousands of civilians trapped in rebel controlled areas had to brave the fighting and cross hostile terrains including a lagoon to enter government controlled areas.

Cabral said since hostilities ended banking services have grown in the former war zone amid challenges allowing people to start up livelihoods.

The Central bank says lending was extremely challenging because people lacked securities to offset loans and title deeds to land.

“It is very difficul