Samagi Jana Balawegaya (SJB) MP S.M Marikkar has written to the Chairman of the Committee on Public Enterprises Ranjith Madduma Bandara calling on him to summon the Bank of Ceylon (BoC) before it immediately to stop the “impending collapse of Sri Lanka’s banking system”.

Marikkar, who is also a member of the COPE in his letter dated 2 January accused the BoC of being complicit in the exacerbation of the economic crisis by failing in its duty to charge dues from state institutions and powerful persons in Sri Lanka. The MP noted that these unpaid loans amount to more than Rs. 200 billion. Marikkar said these facts were presented before the COPE on or about 24 May 2022 by way of an audit report submitted by the Auditor General's Department. “A cursory reading of it is sufficient to shock the conscience of any citizen,” the MP said.

The SJB MP noted that this serious issue impacts the country’s economic prospects and the banking unions have raised their concerns in this regard on several occasions including by holding a press conference to reveal that certain VIPs had been granted loans exceeding Rs. 200 billion.

The MP pointed out that ten state-owned enterprises had obtained massive loans from the BoC amounting to 96.44 per cent of the total loans given to the state.

“Although the bank has failed and conveniently ignored its responsibility to recover dues from ten state institutions, and powerful politically connected and influential persons - the economic situation of the country is in shambles. Whilst the Government has raised interest rates in the country exponentially, thus increasing the helplessness of the common man who has been driven to further economic hardship and uncertainty, the Government has inherited years of economic mismanagement, corruption at the highest echelons of office, and has defaulted on its international loans - and is presently awaiting a bailout from the International Monetary Fund,” the MP noted.

“By 2021, compared to 2017, SOES had obtained massive loans and advances from the BoC. This is an increase of 209 per cent. That figure is Rs.722 819 Million. Whilst this is so, citizens are languishing with skyrocketing inflation, food insecurity, and a deep discontent with the Government's management of the economy,” he added.

The MP pointed out how the public is constantly hounded by banks for payment of loan instalments while the BoC is turning a blind eye towards its own failure to recover large amounts of monies which have been lent- in possible violation of creditworthiness principles and other good banking practices, due to political favouritism and other factors. The MP told the COPE chairman that this must be addressed with urgency.

“The Constitution of Sri Lanka, in Article 148, clearly sets out that it is Parliament that shall have full control over public finance. This is clearly tied into the legislative sovereignty of the citizens of the country and the abject failure of Parliament to take charge of the gross negligence and failure will undoubtedly have severe consequences for our country,” Marikkar emphasised adding that the Parliament itself has delegated the power to COPE in order to probe deeply into these problems by exercising the powers vested on COPE and thus the COPE shall take all measures to investigate into matters of this nature which are deeply ingrained in the fundamental problems in the country.

“You are also aware that the recent UN report compiled by outgoing UN High Commissioner for Human Rights, Michelle Bachelet, for the first time drew attention to economic crimes committed in Sri Lanka, which stated that in order for sustainable improvements to take place, it is vital to recognise and address the underlying factors which have contributed to the economic crisis, including embedded impunity for past and present human rights violations, economic crimes and endemic corruption,” the MP told the Chairman. He noted that failures by the BoC directly impinge on gross fiscal mismanagement.

“It is imperative that accountability must prevail. There is a pivotal role that must be fulfilled by COPE to resurrect Sri Lanka's economy. As such, I urge you, as a seasoned academic who has worked in Sri Lanka's education system and has been given this opportunity to rectify issues in this deeply flawed structure of governance - to summon before COPE the Bank of Ceylon - and demand answers on behalf of the public as to why it failed to exercise its most basic responsibilities to avert a national fiscal crisis,” he said.