Although the Central Bank and the Governor were always talking that Sri Lanka will not be effected by the Global Financial Crisis, the recent events have revealed that their predictions were dead wrong.

The financial institutions in this country have been moving from a bad to a precarious position. Sakvithi Investments, Daduwam Mudalali, Golden Key and now Seylan only corroborates the claims we have made. Where is the good governance and the pro active actions that needs to be taken by a responsible Central Bank?

The Central Bank has been called before the Committee of Public Enterprise on more than two to three occasions but have avoided questioning. They seem to be conveniently ducking their responsibility and seeks refuge under various unacceptable excuses. On the instance of Seylan Bank, has there been due diligence done in acquiring such an asset overnight? Has it been done for political persecution or is it on national interest?

It is well known that Bank of Ceylon is financially in an unsound position. As a result such a badly managed institution taking over the Seylan Bank without any due diligence even at a very basic level, virtually amounts to the public taking over unknown liabilities of the Seylan Bank.

The Central Bank of Sri Lanka should have intervened by appointing a trustee like an accounting firm with back up teams to review the balance sheets and brought about a gradual control. Instead they have transferred the burden of running a major operation to another incapable bank like the Bank of Ceylon. In other words, the public in the future would be called upon to bear the huge losses that are likely to take place within that group.

In a country where inflation has been running at 30% , the dollar being artificially pegged and suddenly allowed to depreciate to protect foreign reserves, these reserve evaporating within a couple of weeks owing to the lack of financial stability, foreign funds invested in treasury bills and bonds moving out of the country, undesirable commercial loans taken at astronomical interest rates placing the burden on the people, are in fact fiscal management policies that have been followed the Central Bank. They have brought the country to it’s knees financially.

The policy makers take pride in taking on the world as if the world is inside Sri Lanka and not the other way round. The result is that we are alienating ourselves from the international community.

Now we hear that the Governor of the Central Bank who has only been serving his political gurus has apparently invited bankers for a presentation of his 2009 road map. These road maps for 2007 and 2008 have taken the country to economic disaster. The Governor has not been able to fulfill any of the proposals in his previous road maps over the last two years and he’s again preaching something which he will never be able to achieve.

This is the result of making political appointments to non political positions. This has been a sacred institution which has not been politicized before. It is absolutely necessary that we should look at the economy from a non political angle and appoint proper people to sensitive positions without trying to fit square pegs into round holes.