Sri Lanka is going through its worst economic crisis in its history and while the Government is taking several meaningful steps to successfully overcome this, as citizens, people too have to make sacrifices, said President’s Counsel Ronald C. Perera, who assumed duties as Chairman of Bank of Ceylon for the third time last Friday.
He said that one way to support the country is to help increase revenue by allowing the Government to invest in key thrust areas that need urgent attention. For this, people who ‘have’ and ‘earn’ can support this measure by paying income tax to uplift the lives of people who are struggling to survive.
He said that as a prominent lawyer, who was practicing for nearly three decades and putting his earnings into his pocket and going home, for the first time he too is paying taxes. “Today I find that part of my usual income has come down as part of it is being channeled to pay income tax.”
However, looking at it from a different angle I am happy and content that the contribution I make by paying income tax is collected and put to good use by the Government.”
He recalled that due to Government revenue falling, people had to face unprecedented hardships never faced in the history of the country, a few months ago.
People had to wait for several days in long queues to buy petrol, diesel and gas and there were very long power cuts as well. Sometimes the fuel queues stretched miles and lasted for weeks at the cost of the lives of people.
In addition, people living in housing schemes in Colombo and its environs had no means to cook as they did not have the knowhow to cook using traditional methods like firewood.
It was also during this time that the whole world changed due to the COVID-19 pandemic and the lockdowns experienced in our country during this time and the very rash decisions taken such as on chemical fertilizer which added pressure on the public went on to aggravate the then situation.
This frustration and anger by the public led to an Aragalaya with the Galle Face Green and the Presidential Secretariat becoming the site of a new political movement in April 2022. This ultimately paved the way for an appointment of a new President (in place of Gotabaya Rajapaksa) and Prime Minister (in place of Mahinda Rajapaksa).
Parliament, according to the Constitution, legally elected Ranil Wickremesinghe as President and he had to ‘bite the bullet’ and take very unpopular decisions in terms of turning the economy around.
President Wickremesinghe was successful firstly in ending these long queues and power cuts and then taking several meaningful and productive steps towards economic consolidation.
“Today Gas and fuel are freely available and power cuts are limited to less than three hours. Also with economic fundamentals falling into place, the Sri Lankan economy is also limping back to near normalcy.”
Ronald Perera who assumed duties as the 28th Chairman of the Bank of Ceylon Head Office for his third tenure was welcomed by the Bank’s newly appointed General Manager Russel Fonseka, members of the Corporate Management, bank staff and other well-wishers.
An experienced lawyer, Perera obtained his LLB from the University of Colombo and a LLM in International Trade Law from Northumbria University and was appointed as a President’s Counsel in 2012.
He has wide experience in Civil and Criminal litigation, negotiation and drafting of commercial and transport contracts and agreements. He has specialized in Commercial Law, Banking Law, Industrial Law, Injunctions, Defamation, Election Petitions, Civil Appeals, Revision Applications, Writ Applications, and Fundamental Rights Cases. Additionally, he has appeared in several Commercial Arbitrations.
Following is a ‘Chit Chat’ with the new Chairman of Bank of Ceylon PC, Ronald Perera after assuming office on Friday.
Q: Many say that the current economic policies are short-sighted and lack direction?
A: This is not true and these are just political talks. Who or whatever political leader or party that is in power will have to take this current path that is being taken. There is no other alternative. One has to remember that Sri Lanka is in huge debt and debt servicing needs restructuring and IMF support for a country to move forward. We have to get out of our debt crisis. This is what is currently being done and whoever is in power has to follow these basic consolidative steps.
Q: Why is the Government resorting to selling assets of profit making entities like Sri Lanka Telecom and Sri Lanka Insurance?
A: Sri Lanka needs to strengthen its Foreign Reserves (which are currently around USD one billion) and due to this there is substantial pressure on the Sri Lanka rupee which’s around Rs. 370.
The restructuring/selling process will result in bringing FDI to these entities and they will go to strengthen Sri Lanka’s Foreign Reserves by adding around 3 to 4 billion US dollars. This will firstly help to strengthen the country’s Foreign Reserve position which will also have a major positive impact to the US dollar.
When the restructuring is complete, the expected revenue coming in at around Rs. 370 plus will come down by nearly Rs. 100 and the Cost of Living too will come down since we have to pay less rupees for imports.
Q: Does the Government have plans to privatize State Banks?
A: Definitely not. The President is of the view that the State Sector should move out of some sectors and allow the Private Sector to be engaged in these businesses. The President has emphasized that the Government should get out of all commercial sectors except for the financial sector. He has said that the financial sector and the State Banks especially would be strengthened to face the new challenges.
Q: How do you review the high lending rates today?
A: It’s true that very high interest rates have to be charged when giving out new loans and due to this many people are unwilling to take out loans. Due to current economic conditions some of our existing borrowers are struggling to repay their loans. The easiest and most common way is to take legal action against them and sell their properties and earn the due amount to the bank.
But I see that there is no point in auctioning their properties or instituting legal action. We must try and see how we can revive those enterprises which in turn will help more economic activity as well. The Bank of Ceylon is like the right arm of the Government and should also help in economic revival.
For this we help in a special bailout package which is being coordinated and executed by the bank’s restructuring unit. We can even give them another advance to revive.
As for new loan applications we must not look at new customers seeking credit as criminals/suspects (as done by the (CID) but treat them with respect and must expedite their loan applications in quick time.
The current interest rates are high but they should come down which will allow people to borrow and engage in businesses again.
Q: You are returning as the Chairman for the third time, what strengths and weaknesses do you see?
A: The biggest asset I see in the BOC is not the buildings or its cash reserves but the staff who are now younger. I appeal to you to join me in harnessing your talent and commitment to its fullest potential in order to take our Bank forward and enhance its contribution to the national economy at this crucial time.
I think one gray area is the delay in executing loans and undue time taken for approvals. This has to be streamlined and done more quickly. I don’t see why a mortgage loan should take time since the customer provides a land given as collateral.
Q: What are the bank’s overseas expansion plans?
A: Our overseas branches in Male (two) Chennai and Seychelles are performing above expectations. They are looking to expand and open a branch in Bangalore and are awaiting approvals.
For this the BOC should work with NPL customers and even advance them more loans and help to make them revive again through the bank’s business revival unit.
Q: You are heading Sri Lanka Insurance and several other companies. How would you find time to divert your attention to the BOC?
A: I have a very good management team at the BOC and I am also an efficient manager of time and hence there is no issue here.
Add new comment