A state bank prepares to dole out a Rs 10bn loan to a Director of the Bank

Colombo (News1st) - The Deshaya newspaper reports that a Director of a State Bank who also holds positions at several affiliated financial institutions, has obtained a loan of 10 billion rupees from the State Bank for his private institutions. According to the report the loan is said to be the largest loan ever granted since the inception of this State Bank 65 years ago. The report adds that the loan facility has been approved at multiple stages and had also received the approval of the bank's board of directors and loans committee. When the Deshaya newspaper had made inquiries from the Chairman of the State Bank, he had confirmed the report of the loan adding that the loan had gone through the proper channels. The state bank chairman was also questioned on whether there was no conflict of interests, given the connections between the director and the group of companies that had been granted the loan, however, he had said that he could not respond. Inquiries made by News 1st revealed that the loan of 10 billion rupees had been made to CML Walkers, a construction contractor by the state-owned People's Bank. Responding to inquiries made by News 1st, the Chairman of the Large Scale Loan Board at People's Bank, Dr. Aminda Methsila noted that the Bank had already loaned about 50 billion rupees to this company as at 2014. He noted that the company had repaid this loan. Dr. Methsila added that accordingly, loans could be issued to the company in question, with a credit limit of 50 billion rupees. According to the 106/2017 Annual Report of CML Walkers, Jehan Amaratunge is the Executive Vice President of the Group. He is also a member of the Board of Directors of People's Bank and has served in that position since 2010. The Chairman of the Bank at the time of Amaratunge's appointment was Gamini Senarath. The company CML Walkers has been awarded contracts for the construction of many government projects including roads and bridges - among these is the contract for the construction of a section of stage 2 of the Central Expressway. Is it fair for an individual who serves as a director of a state bank to obtain a 10 billion rupee loan from that bank to benefit his private businesses? Is it legal? This state bank holds the money of the people of this country? Is it not their duty to properly manage this money and ensure that the people reap the benefits? Was the proper procedure followed when approving the loan of 10 billion rupees from a state bank? News 1st is keeping watch. More information on this will be divulged in the near future.