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Sunday, March 3, 2024

Rs.125 billion written off as bad debts

A massive Rs.125 billion has been written off as bad debts by the two state banks during the past ten years, Parliament was informed yesterday. This was much higher than the government’s allocation for health, education and economic development sectors.

The government usually allocates amounts ranging from Rs.40 billion to Rs.75 billion for each of those sectors every year.

The Bank of Ceylon has written off Rs.116.5 billion while the People’s Bank has written off Rs.857 billion.

UNP MP Ravi Karunanayake tabled in Parliament two separate documents which had been sent to the parliamentary Committee on Public Enterprises (COPE) recently by officials of the two banks outlining their out standings and non-performing loans.

According to the letter send by the Bank of Ceylon Additional General Manager Rs.11.3 billion had been written off last year; Rs.12.6 billion in 2010; Rs.15.5 billion in 2009; Rs.13.8 billion in 2008; Rs.11.3 in 2007; Rs.13.6 billion in 2006; Rs.12.5 in 2005; Rs.12.3 billion in 2004; Rs.17.1 billion in 2003; Rs.19.9 billion in 2002 and Rs.21. 8 billion in 2001.

The People’s Bank had written off Rs.788 million in 2011; Rs.316 million in 2010; Rs.157 million in 2009 and Rs.787 million in 2008.

Mr. Karunanayake moving a private member’s motion asked the government to introduce a law to provide for the publishing of names of defaulters who had burrowed more than Rs.100 million each.

“In these instances, we are informed by the officials of these banks that politically influential people have defaulted payment of their loans in this manner. I know the government is always hunting people who have defaulted Rs.20,000 or Rs.30,000 borrowed for the agricultural activities. Yet, they keep silent on these influential people,” he said.

Mr. Karunanayake said at Lankaputhra Bank, the rate of non-performing loans was high as 50 per cent.

“The government spends only Rs.8.8 billion to give Samurdhi subsidies. Yet, they have written off loans worth Rs.11.4 given by the Bank of Ceylon to political henchmen,” he alleged.

Senior Minister D.E.W. Gunasekara said there were legal obligations that made it difficult to publish the names of defaulters.

 (KB & YP)


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