Tuesday, January 12, 2016
Serious flaws in the Central Bank’s procedures for identifying and acting on financial irregularities.
It is no secret that one of the most important tasks of the Central Bank is to regulate Financial Institutions. As in the Golden Key Fiasco, it is NOT sufficient to stand back and say that they were not regulated by the CBSL and therefore no responsibility lies in the CBSL for any improprieties even though the amounts are significant like Rs35B.
It is therefore very surprising that Entrust has gone into difficulties under the noses of the CBSL that is responsible for its regulation as a Primary Dealer.
Frankly the CBSL MUST have known about this problem for years, at least 3 years that the Management of this institution was NOT up to par, and there were serious lapses in its management. Under the Rajapakse regime, the rogue, Nivaard Cabraal to please his patron MR did not rock the boat as he had much more to line his pockets and presumed MR to last forever. All this will come to light, and prosecution in due course. However it is unforgivable of the CBSL under the new administration NOT to take this course of action immediately on assuming office. After all the misappropriation of the CEB EPF funds amounting to Billions is NOT a new story, and Entrust, being Entrusted with the money, (no pun intended) merely entrusted it in their won bank accounts, effectively leading the high life on other people’s money.
WHY is the CBSL not bringing these culprits to book? By not catching them earlier, they have been able to swindle more from this bankrupt institution, under the very noses of the CBSL, and NO one is saying anything about it.
The answer is that current senior CBSL staff, at Deputy/ Assistant Governor and Director levels may have known about it and done nothing about it. Is it the same culture, that is within the CBSL hierarchy that benefitted handsomely during the MR regime, and made money for themselves, at the expense of the country, who still sit in those positions and suck up to the present Governor and have pretended to be his best friends, the type who in power no matter who is in Government? It is for us the public to ask the questions and the state to give the answers.
How many more skeletons are lurking in the cupboards yet to be discovered? How many more Entrusts? ETI or which Finance Company is now insolvent, and not taken over. The top are still fleecing these bankrupt institutions until the CBSL steps in and takes them over. How many more dead ducks is the state going to allow like this to carry on?
It is time to stop this old boy network protecting crooks, and saving the Tax payer from bailing out bankrupt institutions. Sri Lanka is in a credibility crisis over how these institutions are regulated and supervised, and the Supervision MUST be tougher, and decision making more immediate. Govt servants will get their paychecks and dont want to rock the boat, even if it will cost the state billions.
Not only do we have a bloated Govt. service, they are making the current situation worse. Is it time we privatize the CBSL and incentivise the staff and threaten them with imprisonment if they fail to carry out their duties? We must do it now, or otherwise why are we paying the CBSL staff so much more in wages, if they are incapable of doing the job, or making crucial decisons that affect the economy.