Archives

Privatisation, a prerogative of the government says World Bank

by Kushani Ratnayake

The World Bank reiterated that the privatisation programme is a decision of the Government and the bank's advice and support is simply one of sharing information and experience.

A World Bank statement said that they did not have any discussions with the representatives of trade unions on Bank of Ceylon, the National Savings Bank, Customs or Inland Revenue.

With regard to Bank of Ceylon, their discussions with the bank's management was on how BoC can improve its operating performances and financial positions, the statement said.

The statement clarified nature of its support to the Government of Sri Lanka's banking reform programme. It also expressed concern that the World Bank's position has been misrepresented by media, based on a meeting between the World Bank Country Director for Sri Lanka, Peter Harrold and trade union representatives.

A local Sinhala weekly and a trade union bulletin had reported that the World Bank will withhold aid allocated to support the Poverty Reduction Programme of Sri Lanka until the State Bank and Financial Institutions are privatised.

The World Bank expressed concern over a report that private sector involvement of the kind the World Bank is advising put banks in the hands of "racketeers". "While it is true that banks have a better chance of performing well with the autonomous management, the effective regulations of banks on the part of the Central Bank to ensure safe and sound banking practices, is absolutely essential. This is part of the advice the World Bank and many other international development organisations provide to governments", it said.

"It is widely recognised that a high level of bad loans and high operating costs in state commercial banks would lead to inefficiencies in the banking system. This will result in wastage of part of the country's savings, and will cause depositors to receive lower interest on their deposits", the statement said.

www.crescat.com

News | Business | Features | Editorial | Security
Politics | World | Letters | Sports | Obituaries |

Produced by Lake House
Copyright 2001 The Associated Newspapers of Ceylon Ltd.
Comments and suggestions to :Web Manager