Monetary Board suspends Pan Asia Bank’s primary dealer status

The Monetary Board of the Central Bank yesterday announced the suspension of primary dealer status of Pan Asia Banking Corporation PLC (PABC) for six months with effect from August 15, 2017.

“This regulatory action is based on the findings of an investigation carried out by the Central Bank related to PABC’s transactions with Perpetual Treasuries Ltd in the government securities market,” a Central Bank communiqué said. The Central Bank stressed that this regulatory action does not in any way affect PABC’s ability to carry its banking activities and as a licenced 
commercial bank.

PABC in a statement to media also clarified that this regulatory action by the Central Bank only restricts the bank’s access to the primary actions for government securities. 

“Pan Asia Bank wishes to emphasize that the bank’s regular banking activities or its ability to deal in government securities in the secondary market are not impacted or limited in any manner due to the above regulatory action of Central bank of Sri Lanka,” PABC said.

Meanwhile, the Central Bank said action would also be taken to safeguard the interests of the customers and counterparties of PABC in the government securities market, in an orderly manner.
Many believe the testifying of a senior PABC official at the presidential commission appointed to inquire the alleged irregularities in government bond sales in 2015 and 2016 was crucial in unlocking some of the scheming behind the alleged scam.