29 November 2016 12:05 am
It was a sacrosanct place that was giving out—due to bias of those— political information related to government’s activities,” Karunanayake told a press conference last week. Current Central Bank Governor Dr. Indrajit Coomaraswamy, who has received widespread approval, had last week said that the dominance of the fiscal policy over the monetary policy needs to end. He had also said recently that the decision to move government debt management out of the Central Bank is welcome, since the Central Bank does not have enough visibility to manage government debt. Former Central Bank Governor Arjuna Mahendran too had famously defied Karunanayake’s attempts to bring in a 90 percent loan-to-value ratio for vehicle leasing, capping the limit at 70 percent late last year. Karunanayake meanwhile further justified the move to reduce the Central Bank autonomy by pointing out that the many banks and financial institutions have crashed due to an inept monetary policy regulator. A number of financial institutions and a primary dealer engaged in alleged fraudulent activities were taken under the management of the Central Bankapproved director boards during the governorships of Ajith Nivard Cabraal and Arjuna Mahendran. However, the Central Bank last month moved to set up an enforcement division in an attempt to monitor frauds at financial institutions more closely. Meanwhile, when Mirror Business inquired whether the Central Bank was politicized under the UNP’s watchful eye, since a massive bond scam occurred during the governorship of Mahendran, who was appointed by Prime Minister Ranil Wickremesinghe, Karunanayake responded in the negative. He said that it was only the media interested in proving that a bond scam had occurred. He further went on to say that the proposed national payments platform— which has received widespread criticism for invading into the Central Bank processes—will be implemented through the Information Communication Technology Agency (ICTA) because the finance minister has the power to do so. “Under the Payments and Transactions Act, the Finance Ministry could use the Central Bank. So now we are using the Central Bank and ICTA,” he said and shot down allegations that the national payments platform would be managed by private companies. The recent budget had also proposed to create quotas for bank lending based on geographic and industry categorizations, a decision usually taken by the Central Bank. (CW)