Treasury continues to default Central Bank

22 March 2013 02:38 am - 1 - {{hitsCtrl.values.hits}}

A A A

The Treasury has blatantly and repeatedly violated section 89 of the Monetary Law Act over the last decade, failing to settle the loans temporary obtained from the Central Bank (CB), an Opposition Party legislator alleged.

“In 2010 and 2011 the unpaid advances by the Treasury stood at Rs.78 billion and Rs.95 billion. I also found out that last time these advances were settled was in 2003. Since then the Treasury has repeatedly defaulted the CB,” United National Party Parliamentarian and economist Dr. Harsha de Silva said.

According to the section 89 of 1949 Monetary Law Act of No. 58, the government/the treasury can obtain temporary advances from the Central Bank. But the treasury must ensure that they be repaid within a period not exceeding six months. Further, the total amount of such advances outstanding at any time shall not exceed 10 percent of the estimated government revenue for the financial year during which they are made.

“I agree with the President for obtaining loans for development, but must also tell that unless these borrowed monies are not channeled for commerciallyviable projects, we will have to suffer from higher inflation and devalued rupee. The real economic hit-men are the ones who siphoned off these funds to politically-motivated projects,” he quipped.

De Silva further questioned another move by the government to waive off the CB of Economic Service Charge (ESC) which will result in losing an income stream so far received by the government.

“Tell us what is expected of this because I do not see any logical reason as to why you are going to stop an income stream for the government, particularly from an institution in the magnitude of the Central Bank. The Central Bank does not lose anything due to this tax. I urge the authorities to continue to tax the monetary authority as it helps the people of this country.”

In 2010 and 2011, the CB has paid Rs.95 million and Rs.120 million respectively as ESC to the Treasury.

“I do not see any logic in why you are trying to stop Rs.120 million revenue to the Treasury from an institution which earns a profit of Rs.46 billion (in 2011),” he remarked.

See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

Comments - 1

Linus Friday, 22 March 2013 11:52 AM

ESC is Incoem tax paid in advance. If CBSL is paying income tax on their profits, then there is no financial implications to the Govt by exempting CBSL from paying ESC. Govt will only have a time difference in getting cash. Trust my thinking is correct?

Add comment
Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Treasury continues to default Central Bank

Comments - 1

Add comment

RECOMMENDED

How a 19-year-old TikToker is helping bring back the Woolly Mammoth!

Unmasking Sri Lanka’s Pyramid Parasites

Writing Letters to Michele Bachelet Causes Turmoil Within the TNA

A state-sponsored elephant racket in the works

Waiver of registration questioned: Import of covid related drugs, products shrouded in controversy

Mysterious disease killing pups!

Jacqueline Fernandez; Lankan Star Shining in Indian Film Sky

Most Viewed in News

SLC to ‘seriously consider’ replacing New Zealand in Pakistan if invited

COVID snatches another doctor’s life

Lockdown further extended till Oct 1

Eliyantha White succumbs to COVID-19

Major decline in COVID cases, hospitalization: Health officials

Vaccination centres drying up as youngsters refuse vaccines

TODAY'S HEADLINES

Vaccination for kids against Covid-19 kicks off

Covid curbs to be lifted on October 1 in measured steps

COVID related deaths UNP says drop in numbers due to lockdown

CMC steps in to assist vaccine roll-out for children

MIRROR CRICKET

England take early T20I series lead over Sri Lanka

New Zealand clinch World Test title

LPL 2nd edition from July 30-August 22-SLC

Sanath Jayasuriya signs as coach at Melbourne cricket club Mulgrave

Mahela appointed as ’Consultant’ for T20 World Cup

Setefano considered for SL 7’s Head Coach Job

Sri Lanka’s chances of making history to be ruined by administrators?

’Western bloc’ has let Pakistan down, board chief says