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The Treasury has put a lid on government owned entities from investing surplus funds through private owned financial institutions with immediate effect. The Treasury is going by an existing rule under Section 11 of the Finance Act of 1971, where excess cash in public corporations cannot be invested through private financial entities, without the approval of the relevant subject minister, who will decide in concurrence with the Finance Minister.
In a circular to all state institutions, Deputy Treasury Secretary S P Divaratne says it has come to their attention that several investments have been made via treasury bills and certificates of deposits through primary dealers and other brokers.
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Such investments, if made, have to be stopped immediately and the surplus investments should be routed through People’s Bank and Bank of Ceylon, Divaratne said.
Existing investments that carry Ministerial consent, have to get a fresh approval from the relevant authorities, he added.
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