The Ceylon Bank Employees’ Union (CBEU) said that the Government should work to protect the confidence of domestic depositors in the process of restructuring domestic debt, The Daily Morning learnt.

Speaking to The Daily Morning yesterday (27), CBEU General Secretary Ranjan Senanayake said that through the domestic debt restructuring process, bank deposits and depositors will not be harmed in any way and that therefore, people should not have undue fear about it. “Domestic debt is the debt given to the Government by various banks and companies. These are bonds and bills. Domestic Debt Optimisation primarily involves Treasury bonds, and secondarily, Treasury bills. There is a separate technical process for this. In that process, banks have the ability to manage them. Therefore, there will be no harm to bank deposits and depositors,” he said. Commenting further, he said that depositors should not lose faith in the banking system by instilling undue fear. He said that such a breach of trust can also be harmful to the banking system.

Recently, the Central Bank Governor Dr. Nandalal Weerasinghe stated that an extended bank holiday was declared from 29 June to 3 July, 2023, in order to obtain the necessary time required for the domestic debt optimisation strategy of Sri Lanka. Making a special statement regarding the matter on 25 June, he also assured that no deposit in any bank in the country will be affected in the process of restructuring domestic debt and that interest will not be affected.

The move comes a year after Sri Lanka decided to suspend servicing its foreign debt, to combat the Sri Lankan economic crisis. The Government subsequently entered into an agreement with the International Monetary Fund and secured a nearly United States Dollars ($) 3 billion package from it, while agreeing to restructure both its foreign and domestic debt that the Fund estimated is at about $41 billion and $42 billion, respectively, as of March, 2023.