PARLIAMENT

Development at double digits

Parliament Corrs

Speaker Chamal Rajapaksa presided yesterday when Parliament met at 1pm. After presentation of papers and oral questions, Parliament took up the second reading of the Recovery of Loans by Banks (Special Provisions) (Amendment) Bill.

International Monetary Co-operation Senior Minister Dr Sarath Amunugama: The people who had obtained loans upto Rs five million can solve their problems under ordinary law.

This is not a problem that concerns only the Parate Execution, but also concerning banks. We have to ascertain the links between banks, development and those who obtained loans from banks. All those institutions are interlinked. We have suggested for the increase in the limit of Parate execution to Rs five million.

We have to protect the banks as they are not isolated. If banks face bankruptcy, all other areas face the same fate, a lesson that we have to learn from America.

When the banking fields in America face bankruptcy, all other interlinked institutions face a crisis.

Our view is to come to the 30th position in the Business Index. We are planning to increase the economic development rate to nine percent next year.

Our main aim is to rectify the mistakes in our financial sector and increase the development rate to double digits within a few years.

Once this Bill is passed, even pending cases will come under the purview of this law. Our view is not to penalize the people, but to grant them relief.

Even banks are reluctant to go before Courts. This is a good suggestion for all to increase the Parate Execution limit to Rs five million or if it is not sufficient we can reconsider it later.

It is no secret that the economy is developing. Nobody can deny that a large number of tourists have arrived in Sri Lanka. Now, all the hotel rooms down South and in the central provinces have been booked.

Ravi Karunanayake (UNP): The Government has only concentrated on how to protect banks. It has not concentrated on protecting those who have obtained loans.

If those who have obtained loans of Rs five million are unable to resettle them, will their belongings be forfeited.

This is just a measure to protect the banks and mak way for the recovery of loans.

But I would like to draw your attention to the many Government institutions who had not resettled their bank loans.

A sum of Rs five million is not a big amount today. This limit should be increased to Rs 50 million as the purchasing power was also reduced drastically within the last few years.

What happens at a Parate Execution is, if a loan cannot be resettled, his belongings will be taken over by the bank.

Water Supply and Drainage Minister Dinesh Gunawardena: This amendment enables measures to be taken against those who have not resettled their loans under ordinary law. Today, the banking sector has been widened. It is we who peopalized the Bank of Ceylon and it is we who established the People's Bank.

This is an appreciable amendment. The Opposition wants the Parate Execution limit increased to Rs 50 million. But when I made a request on January 30, 1990 for the increase of the Parate Execution limit to Rs 150,000 Ranil Wickremesinghe objected.

So today we have come a long way and we have no idea of bankrupting the banks.

Under this legislation, farmers and people engaged in self-employments will find relief. People should not be afraid of taking loans if they settle them properly.

We have to provide relief to those who attempt to develop themselves. Banks are also protected. See what happened to Seylan Bank? The people are unaware of what happened to it until it went bankrupt.

The Central Bank intervened and protected the bank as well as depositors.

With this amendment, the black money circulation will be minimized and will also open the gates for investors.

My father, the late Philip Gunawardena had to go home when he attempted to establish the People's Bank.

Under these amendments, the people will get more relief.

Chandima Weerakkody (UPFA): I regret the fact that the Opposition Leader spoke with ignorance pertaining to regulations on bank loans.

It is the UNP which presented this Bill to the House. We must be happy that the President initiated this Bill today. He believed that the Bank Loan Bill should be amended in a people-friendly manner. He said that the public should be able to obtain loans without fear and that the necessary background should be made for it.

The interest rate which was about 22 percent in the past, has now decreased to 11 percent. The era that we will be providing loans for an interest rate of a single digit has now dawned.

This initiative will also help the people invest more on tourism. The tourism sector is rapidly growing and necessary measures have been taken to provide facilities for its promotion.

It was seen that the Unawatuna beach was like Pettah on the 31st night with such a large number of tourists.

Deputy Speaker Chandima Weerakkody takes the Chair

M A Sumanthiran (TNA): During the UNP regime, the amendment was sought to the Bill on the words 'borrower' and 'mortgager'. I hope the House can remember the incident.

I think this Bill is contrary to the Government's policy of limiting the harsh powers of 'Parate'.

A H M Azwer takes the Chair

M A Sumanthiran continues: This law in its entirety, is draconian. It has caused hardship to banks as well as borrowers. It has caused hardship to banks because when granting loans, the banks do not seek the methods of repayment.

The clauses in this Bill should be further clarified. Nothing should be left for doubt. I request to repeal this law in its entirety.

R Yogarajan (UNP): I am here today to speak about the recovery of loans by Banks Bill, after witnessing three of my friends become victims of 'Parate Execution'. Two of them had to sell their residential property to settle their loans to the banks. The Government urged all banks to reduce interest rates two years before. However, the banks reduced the deposit interest rates. Today, saving interest is low as four percent. Usually, banks are allowed to charge higher interest rates for loans because it is an act of borrowing.

Both Government and private banks earn exorbitant profits. Pawning has become very popular in the banking sector.

However, this is not proper banking.

Social Services Minister Felix Perera: I regret the fact which said that banks have no hearts. The People's Bank is considered a bank with a warm heart. It has opened 23 branches in the North. This bank has 654 branches islandwide.

About 95 percent of the borrowers repay their loans obtained from banks. It is a new trend and only a very few do not repay their loans.

Deputy Chairman of Committees Chandrakumar Murugesu takes the Chair

Felix Perera continues: The unrecovered loan percentage of the Bank of Ceylon is 3.3 percent.

The country too repays the loans borrowed. That is why foreign countries and organizations provide us with loans.

This is a welfare Government and millions are spent on welfare work. This Bill is another welfare Bill initiated by the Government. We made inquiries about hotel rooms in the country. It was found that no rooms were available in the hill country or in Negombo. All hotels were filled to capacity due to tourist arrivals to the country.

I have also taken many loans, but I have never failed to repay them.

Wijayadasa Rajapaksha (UNP): People recognize this law as a draconian system of law, when it was introduced. Even though Parate Execution rights were given to banks, there was hardly any occasion where the banks used this right in the past. But after the emergence of private banks, they pressurized the Government to extend the Parate Execution right for them too. This is the history concerning this law.

Both Government and private bankers should be reminded that they are existing because of the energy, courage and activities of the small and medium scale industrialists and entrepreneurs. During turbulent times, they should be given facilities to carry forward their business activities. Both parties are trying to do the best for the people and the country and therefore, do not look at us as enemies.

Technology and Research Deputy Minister Faizer Musthapha: I think the legislation introduced in 1990 is a draconian one, where people may lose their property overnight without banks having to go to Court. This amendment has corrected this fact.

The Opposition is engaged in a mud slinging exercise against me due to the fact that I appeared on behalf of the General Secretary of the UPFA in Court. It is not a violation of the law. You may stick to your own opinion, while I will stick to mine in this regard.

Sunil Handunnetti (DNA): While debating the amendment of law in this House, the banks are already advised to provide loans in a more careful manner, stating that a new law disadvantageous to them is passed. A letter has been sent with directives as this law is already in operation.

Banks have been advised to scrutinize all relevant documents before the passing of loans. People will have to face much issues. They will have to queue up even to obtain an ordinary loan. Grassroots level people are not provided any relief by this amendment. But those who obtain loans of large sums will benefit.

National Languages and Social Integration Minister Vasudeva Nanayakkara: When listening to MP Handunnetti, I felt like I was watching a comic film. He wants the door open, but at the same time he wants it closed.

Through the Parate Execution, we protect the property of all who obtained loans from Rs 1,000 to five million. From his previous speech, I could not understand whether he is for or against the Parate Execution. His stand was vague.

The banks are advised to provide loans carefully because under the amendment, the property cannot be vested to the banks easily. People sign agreements for loans without due consideration to the conditions. Those are the people who obtained loans less than Rs five million. We have come forward to protect the property of those people.

Banks are not temples. There are many fraudsters waiting for the right opportunity. That is why the Government has come forward to protect the ordinary people from such fraudsters. Therefore, this must be taken as an important step.

Economic Development Deputy Minister Lakshman Yapa Abeywardena: Shantha Bandara MP presented an important proposal today. Samurdhi was started in 1995 with the aim alleviating poverty in the country. Today the Samurdhi program is further strengthened and altogether there are 26,000 youth employed in Samurdhi program. Among them, 23,000 are Samurdhi development officers.

We are happy to note that Rs 45,000 million has been deposited by people in Samurdhi Banks.

The President has given priority to solve the problems of the Samurdhi officers. He has mentioned his endeavours regarding Samurdhi even in the Mahinda Chinthana. He had met Samurdhi officers at Temple Trees recently. Before he met them, I had the opportunity to convey to the President the main problem of the Samurdhi officers. It was there that he directed me to introduce a pension scheme for the benefit of these Samurdhi officers.

Sujeewa Senasinghe (UNP): When we consider the debtors there are 20 percent who have applied for loans lesser than Rs 5 million from the banks. So this Amendment does not apply to 80 percent who had obtained loans from banks. This parate execution was introduced in 1939. We admire this Amendment. I request you to increase this limit to Rs 10 million.

Thilanga Sumathipala (UPFA): It's a pleasure to hear that the Opposition agrees with this Amendment. When we consider business during the last few years it was very difficult situation.

Only small entrepreneurs have obtained loans of Rs 5 million.

The country cannot be developed with only large-scale entrepreneurs.

Finance and Planning Deputy Minister Geethanjana Gunawardena: Today we can discuss banks and insurance companies in our country because our banks were not bankrupt during the global economic recession.

But the banks in America and many other countries have failed. Banks seize vehicles of debtors in America, but our situation is entirely different.

We spoke of insurance yesterday. We are able to discuss these matters today since President Mahinda Rajapaksa created a peaceful situation in the country.

Under this Amendment, relief is given to the public.

Telecommunication and Information Technology Minister Ranjith Siyambalapitiya: All Opposition members agree to this Amendment. Under this Amendment, debtors who have taken loans less than Rs 5 million are free from their assets being seized without reasonable grounds.

The persons who are unable to settle their loans which are less than Rs 5 million will be dealt with the ordinary law. This is a constructive amendment moved to grant relief to the public and those who engage in small-scale businesses, industries, etc.

The Recovery of Loans by Banks (Special Provisions) (Amendment) Bill was passed with amendments.

The House took up the Committee Stage debate of the Regulations of Insurance Industry (Amendment) Bill.

The Bill was passed with amendments.

House adjourned until 1 pm today.

Speaker warns Azwer

Speaker Chamal Rajapaksa yesterday advised UPFA MP A H M Azwer to be cautious in selecting words to form questions without giving room for ethnic disharmony.

MP Azwer raised a question for oral answers in Parliament regarding land permits of Muslim farmers. When Lands and Land Development Deputy Minister Siripala Gamlath concluded his answer to the question, Chief Government Whip Minister Dinesh Gunawardena stated that there is no separate segment called Muslim farmers. He observed that farmers must be treated equally, irrespective of the fact whether they be Sinhalese, Tamils or Muslims and it is unfair to category them according to their ethnicity.

As that stage, Speaker Chamal Rajapaksa warned MP Azwer to be cautious when selecting words in questions.

Ministers, Deputy Ministers do not appear as attorneys

Speaker Chamal Rajapaksa yesterday stated that he would look into a matter where a Deputy Minister and attorney, had appeared for a defendant Minister at the Colombo District Court.

He made this observation in response to a privilege issue raised by Chief Opposition Whip Joseph Michael Perera. MP Joseph Michael Perera stated that a Deputy Minister who is also an attorney had appeared for a Minister who was a defendant in a petition filed before the Colombo District Court. He stated that Ministers or Deputy Ministers do not appear before Courts as attorneys.

Speaker Chamal Rajapaksa stated that he would look into the matter.

LTTE still operating overseas

Chief Government Whip and Water Supply and Drainage Minister Dinesh Gunawardena yesterday said in Parliament that eight LTTE ships are still in operation overseas.

The Minister stated that none of the ships are registered under the LTTE organization, but registered under various companies and under various flags.

The Minister made this observation in response to a question raised by UNP MP Gamini Jayawickrama Perera. Minister Gunawardena stated that the ships were engaged in human smuggling.

He added that one such incident was that the ship named Feshawari had smuggled humans to Canada. He stated that some of the ships owned by the LTTE were reportedly anchored in a port in a South East Asian country ,beyond repair.

Minister Gunawardena stated that 11 ships owned by the LTTE were destroyed by the Navy during the last eight years. The Minister said that further details could not be revealed due to security grounds and asserted that the Government was taking measures to bring those ships back to Sri Lanka.

At Adjournment

Economic Development Deputy Minister Lakshman Yapa Abeywardena, yesterday stated in Parliament that a pension scheme will be established for Samurdhi officers in the near future.

He made this observation in response to an Adjournment Motion moved by UPFA MP Shantha Bandara. A H M Azwer presided.

Shantha Bandara (UPFA): A pension scheme should be established for Samurdhi officers. At first the youth in villages voluntarily joined the Samurdhi program. Later on, they were given an allowance of Rs 2,000. It is a leading program in South Asia, aimed to strengthen low income families. These officers are making a remarkable contribution to develop the infrastructure facilities in rural areas. But once they retire, they wont's have a pension. The President's attention is drawn to introduce a pension scheme.

Arundika Fernando (UPFA): The educated youth in the villages were recruited to the Samurdhi program to strengthen the economy of the country. We hope those Samurdhi offices would be given a pension scheme.

President Mahinda Rajapaksa, Economic Development Minister Basil Rajapaksa and Deputy Minister are taking measures to provide them this relief.