State banks have not written off any ‘bad loans’, CBEU says – The Island
by Sanath Nanayakkare
There is wide discussion among the people after the COPE committee investigations into large scale loans taken by big businessmen from the Bank of Ceylon and People’s Bank which became non-performing loans. And we would like to report on the real situation on this, the Ceylon Bank Employees Union (CBEU) said last week.
“We must first say that the Bank of Ceylon and the People’s Bank have not written off any large scale non-performing loans. In fact, they have taken steps to recover these problematic loans. Although some of these bad debts were granted or taken with political conflicts of interest, most of them were granted in accordance with accepted banking credit laws. However, with growing public interest and concern about this, we are giving our full attention to any adverse developments in this regard,” they said.
“We must grant loans to large companies to develop the country’s economic activities. However, these funds are given from the deposit base of ordinary people. The banks therefore cannot absolve themselves of their responsibility towards the people. And these loans must be recouped so that the banks can pass the profit on to ordinary customers in the form of higher interest for their deposits and/or other financial products of mutual benefit.
“We, as a union, stress that the loans governing the recovery of large-scale loans granted to large companies must be strengthened, and we will constantly ensure that these loans are canceled by the state banks. We will regularly exchange information on this with the senior management of the state banks and the Central Bank of Sri Lanka with an unwavering determination to monitor the recovery of these loans.
“At this point, the authorities must take immediate steps to implement the necessary political and economic reforms through which the country’s critical banking sector would also be secure and free from undue influence.”
“In the midst of the current economic and political crisis, the country’s banking sector is also struggling. We have pointed out this danger several times in the past. But we cannot content ourselves with the measures taken by successive governments in power. We therefore stand with the people who are demanding political and economic reforms that will transform the way the business of government and the public financial sector is conducted.
“The two state-owned banks make a huge contribution to the national economy every year, paying taxes and paying their dividends out of profits to the Treasury. However, the state-owned banks are currently under considerable pressure, as the government has borrowed large amounts of funds to import fuel, cooking gas, essential foodstuffs, medicines, etc. in the recent past.We insist that strict measures must be immediately adopted to alleviate this pressure on state-owned banks. We would like to tell the public that state-owned banks remain resilient for customer trust, and as a union we are also committed to maintaining that security and reliability in the future,” the CBEU said. .