• Charitha Herath urges SOC/COPF probe on discrepancies between CBSL Annual Econ Review & Finance Min.’s Fiscal Mgt. Report

Amidst various concerns being raised over the independence granted to the Central Bank of Sri Lanka (CBSL) through the recently passed CBSL Act, Opposition Parliamentarian Prof. Charitha Herath yesterday (7) claimed that the CBSL is currently functioning as an institution that is not part of the State.

Speaking in the Parliament yesterday, Prof. Herath raised several concerns regarding the alleged arbitrary behaviour of the CBSL administration, highlighting certain errors in the inaugural Annual Economic Review released by the CBSL recently. Stating that the report carries certain erroneous technical terms, he noted that certain terms and sentences of the report suggest that the CBSL is not a part of the State. 

“This report starts by saying 'the CBSL and the State' which suggests that the CBSL and the State are two separate entities. That should be the Government. There is a separate explanation given to the term ‘Government’ in our Constitution. Obviously, we can classify the CBSL and the Government as two entities. But, we cannot do it with the State since all these entities are operated under the State,” he added. 

He also said that the CBSL has the mindset that it is not a part of the State, which could in turn cause many issues in the future. “The CBSL has presented the Annual Economic Review report. The Ministry of Finance also presented the Fiscal Management Report for 2023-2024. Both of these reports are required to be submitted by the CBSL under the provisions of the CBSL Act. However, I would like to raise within this House the fact that there are a number of serious discrepancies between both the reports. As per the Standing Orders, I suggest that either a Sectoral Oversight Committee (SOC) or the Committee on Public Finance (COPF) should carry out an investigation to assess the information provided in them,” he said.

Meanwhile, Opposition MP Wimal Weerawansa and the Chief Opposition Whip Lakshman Kiriella raised concerns regarding the CBSL's decision to increase its salary, even though the CBSL has incurred huge losses during the past few years. MP Kiriella claimed that the CBSL took the move when it incurred a loss of around Rs. 1,000 million.

Earlier, on Monday (6), Opposition MP Udaya Gammanpila claimed that the CBSL had increased the salaries of its employees by the biggest margin in its history, despite having recorded losses of billions of rupees for two consecutive years. “The net loss of the CBSL in 2023 was Rs. 114 billion. In 2022, the net loss was Rs. 374 billion. If a certain institute incurs losses continuously, the privileges of the said institution, the bonuses and salary increments will be limited and suspended,” he said while speaking to reporters in Colombo. 

However, he charged that despite having continuously incurred great losses for several years, the CBSL is giving its employees the highest salary hikes. “Even if it’s profitable, it’s still public money.” Gammanpila stated that one method that the CBSL can make profits is by providing the Government and banks with credit and collecting the interest. This is possible for the CBSL because it has the sole authority for printing money, he said. 

Meanwhile, the profit obtained from the management of the Government’s official foreign exchange reserves is also a source of income for the CBSL and that means that the funds held by the CBSL are public money, he asserted. Therefore, he called for the immediate resignation of the Governor and the Governing Board of the CBSL for allegedly “deceiving the country” and for claiming that the CBSL is not maintained with the people’s money.