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.

Order Gifts to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Vegetables, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Sending Money,Online Books, Delivery Service, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop 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

75 Years of Independence and the Tamils of Sri Lanka

Jeevan sets a record as Lanka’s youngest-ever Cabinet Minister

TNA was Born in 2001 Due to Elections Shock of 2000

Pain and punishment

Health System in the emergency room

Canada’s targeted sanctioning of Gota and Mahinda

SC judgement on Easter attack: Court rules negligence stood in the way of avoiding most heinous crime

Most Viewed in News

Update: Scientist killed in road accident in Horana

Body of a Sri Lankan billionaire businessman found in Jakarta

China’s offer not sufficient for IMF deal

Despite economic crisis, Treasury allocates billions for Offices of President, PM, Ministers

Missing businessman found dead at his luxury building swimming pool

Lankans unfavourable of all political party leaders

TODAY'S HEADLINES

Man commits suicide after killing children

Indian funded housing project to begin soon

Quake kills over 1,200 across Turkey, Syria

Change in weather expected in coming days

MIRROR CRICKET

Sports Ministry to advertise for cricket selectors

St. Anthony’s records win against Ananda after 74 years

NPCA to conduct first ever T10 cricket tournament in Sri Lanka

Dewmi Vihanga in ICC U19 World Cup Team of the Tournament

Hangzhou Asian Games 2023 Sri Lanka Official Fun Run at Port City tomorrow

Selectors await invitation to pick squads for New Zealand tour

Kandy SC record comfortable 37-28 victory

CR repeat with close 17-14 win