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Consumer Protection Law will hit banks like meteor - Dr. Weerasooria

by Ravi Ladduwahetty

Consultant to the Financial Sector Reforms Committee Dr. Wickrema Weerasooria on Wednesday said that the proposed Consumer Protection Authority Act will hit the banks like a meteor.

This is because banks are included in the Act with all professionals like doctors, lawyers, engineers, architects under the definition of trade and/or services. The Act does not require a President's Counsel to court, Dr. Weerasooria told a workshop on under the theme: "The impact of the financial sector reforms on the banking sector at the HNB Towers on Wednesday night".

The presentation followed the release of five research reports of five listed banks - The commercial banks included Sampath, Hatton National and Commercial. The development banks were - DFCC and NDB.

Dr. Weerasooria said: "Today, the Consumer Protection Law has become the most irksome law which will cover the traders and products such as electricity, gas, financial sector services."

Dr. Weerasooria predicted that people will resort to this piece of legislation, unless the financial services sector had a Banking Ombudsman and a Code of Conduct for the banking sector and the houses were put in order.

He called upon the banking sector to study the proposed Consumer Protection Authority Act as a priority and added that the Act was passed in Parliament but not yet gazetted.

With investments such as Treasury Bills having stable interest rates, I cannot see the rationale how advertisements carrying interest rates of 24 percent can have any validity, he said.

He also cautioned investors about putting their savings into institutions which promised interest rates which were far excessive of the market rates and where these institutions went bust.

It is most unfair for innocent and unsuspecting people to put in their monies into these institutions which did not register themselves with the Central Bank and come crying to the CB later, claiming that the Bank did not take the appropriate action as the regulator.

The media will also have some responsibility in propagating the theory that investments were safe, he said. 

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