Central Bank reforms: PM seeks IMF support

Govt. to reform Monetary Law Act.
CB’s Code of Conduct ignored in the past.

Prime Minister Ranil Wickremesinghe has sought the support of the International Monetary Fund (IMF) to make the much needed legal and structural changes in the Central Bank to combat fraud and corruption, National Policies and Economic Affairs Deputy Minister Dr. Harsha De Silva said.

According to the Deputy Minister, a meeting was held on Saturday in this regard where Prime Minister Wickremesinghe requested for assistance from IMF Country Representative Dr. Eteri Kvintradze given the close working relationship between the IMF and the Sri Lanka Central Bank.

“Giving a summary of the Bond Commission report, President Maithripala Sirisena too noted that the Commission had recommended for reforms in the Central Bank,” the Deputy Minister said adding that accordingly, the government is looking to reform the Monetary Law Act and the Registered Stocks and Securities Ordinance.

“These laws should be drastically amended or new laws to replace them should be introduced,” De Silva added.

According to him, specific areas of the Monetary Law Act, namely the mandate, governance, autonomy and accountability of the Central Bank needs to be reformed.

“The IMF has already prepared certain drafts in this regard following past discussions with the government,” he said, assuring that the government will accordingly work towards making changes in the structure, management and legal aspects of the Central Bank expeditiously,” he said.

At a time where the Central Bank has announced its decision to move towards a flexible inflation targeting regime, the Deputy Minister pointed out that these reforms in laws are paramount to achieve this target.

He also claimed that continuous misuse of the Employees Provident Fund (EPF) occurred due to these reforms not being introduced to the system.

The Deputy Minister also alleged that the Central Bank’s Code of Conduct was ignored in the past with former Governor Ajith Nivard Cabraal only presenting himself at the Public Accounts Committee 13 years after a governor had last appeared before the committee.

While the Bond Commision report is set to be presented to Parliament on January 17, the report will, thereafter, be made available online for the public according to the instructions of President Maithripala Sirisena.

Commending the move, Deputy Minister Harsha De Silva said the Prime Minister has instructed the Attorney General to take the necessary legal action based on the COPE report, the Bond Commission report and the others submitted to him.

“Action must be taken against all those who have been mentioned as wrongdoers in these reports,” he stressed adding that the government is pushing for legal action in this regard.

“We hope the necessary action will be taken by the Attorney General promptly,” he said adding that those who have broken the law must be dealt with.

The Deputy Minister confirmed that the government will work to introduce the much-needed reforms immediately with the assistance of the IMF.

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