Written by Keshala Dias
07 Jun, 2017 | 8:41 am
A member of the Monetary Board of Sri Lanka has stated that during the first few months of 2015, former Governor Arjuna Mahendran played a dominant role at Monetary Board meetings.
Manohari Ramanathan has been a member of the Monetary Board for almost a decade.
She testified that, as Arjuna Mahendran has a better economic expertise compared to the other members of the Board, he was dominant in the decision-making process.
However, after two more members were appointed to the Monetary Board, the decision making process was more collective and democratic, it was pointed out.
She said, the Monetary Board which convened on March 23, 2015, did not reach a decision to issue thirty year bonds and that there was only a discussion to explore the possibility of issuing thirty year bonds.
She went on to state that a decision was not reached to stop the method of direct placements.
Mano Ramanathan added that it was not customary for the Monetary Board to approve the bonds issued but, simply to ratify the bonds issued by the PDD.
J. K. D. Dharmapala, the former Chief Dealer of the Bank of Ceylon testified before the Commission on Tuesday as well.
He said that according to the BOC Treasury Operations Manual, prior approval was not required for bids made on behalf of other parties which include Primary Dealers.
He testified that from 2013 to 2015, 75% of the bonds purchased by BOC were under the Direct Placement method while only a minimal purchase was done through the auctions.
Dharmapala was also questioned on his connection with the dealer of Perpetual Treasuries Limited, Kasun Palisena.
He testified that after the impugned bond auction, he was transferred from the Primary Dealer Arm of the bank to another department and was silent when the Commission asked why he did not say anything against the transfer if he had “done nothing wrong.”
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