Govt to save Rs15bn by moving its accounts to private banks: FM
Dec 20, 2015 (LBO) – Sri Lanka’s Finance Ministry is to transfer part of the government accounts maintained by the state banks to private banks in order to reduce state expenditure.
Finance Minister Ravi Karunanayake told Parliament Saturday that there will be a cost saving of about 15 billion rupees through the new proposal.
“State banks currently have a spread of around 5.5 percent whereas private banks have a spread around 2.
5 to 3.5 percent,” Karunanayake said.
“So we are using that difference. State banks have around 1,000 billion rupees government owned accounts; There will also be an interest income.” he said.
He also pointed out that they are prepared to use that saving to capitalize the undercapitalized state banks in line with BASEL minimum liquidity requirements.
“While protecting state banks we need to raise their competitiveness.
We are also trying to capitalize the undercapitalized banks,” Karunanayake said.
“So we intend the savings on reductions of expenditure and the increase in the savings that we will get through the private sector would be used to capitalize banks.”
Karunanayake said there will be no change in the budget deficit as the recent changes into budget has been set off against cost reductions of the government expenditure.
The third reading of the budget passed with a two thirds majority on Saturday afternoon.
Sri Lanka’s banking sector employees held a demonstration recently against the government’s maiden budget for 2016 while urging a review of budget proposals.
This is another way of making a “KICK BACK” from the private banks in the dark. A through financial study (critical analysis) will show that the political VIP’s in charge of the Finance or interested lobbying groups will be prone to kickback payments for just transferring these large sums of government fund to private banks. While the savings are shown “rosy” it is the kickback that should be noticed. This will also help VVIP Kalu Nayake get large soft long term loans for the expansion of there family business ventures, especially for that of the BOI venture where large scale imports of foreign goods are brought into the company warehouses, cleaned up and re-labelled, re-dated with new expiry dates and then shipped to Middle Eastern and African supermarket chains. There are only 3 such ventures under the BOI given special licences/permits to engage in this business. One of the other company is owned by a Lenbanese Canadian who is also operating a supermarket chain store in Lebanon and Jordon. This company, like the political VIP’s company, buys most of its outdated items from US super market chains like Walmart. The government has to be very caustious in allowing this move. Both President Maithripala Sirisena and Hon. Ranil Wickremasinghe should not be carried away by the reports/cabinet papers submitted by these political VVIP’s in charge of the government finances.
Noor Nizam – Political Communication Researcher – Canada.
Does it really matter if he is having kickback’s or not? What really matters is saving it complements..
Stopping Peter to rob and allowing Paul (himself) to rob the nations wealth.
Noor Nizam.
To eliminate all these we need broad based program which starts from preliminary education.
Facts are stubborn. They cannot be distorted.
governments in most well run countries use the treasury single account (TSA) concept to minimize waster and maximize returns. It is the most preferred method advocated by the World bank for any nation.
however with a house full of rouges it may not be easy to pool all the cash under one roof and make allowances to the government institutions on a daily basis depending on the needs.
It is surprising how such an inept person who claims to be FCMA is coming out with rubbish. It is even more surprising that the UK Institution is not looking into their member’s conduct, whihc has serious ethics violations in the bigger scheme of things.