People's Bank forced to a point of no return?

COLOMBO (News 1st) - As the JVP revealed yesterday (June 23) in a backdrop where the government proposal to amend the People's Bank act no. 9 of 1961, presented by the Minister of Finance on May 24th 2019 sensational details have emerged of the astonishing level of the non-performing loans portfolio of the People's Bank. W.M. Mendis & Company, who are known to be associated with Perpetual Treasuries Limited, have a non-performing loan portfolio amounting to Rs. 2,912,698,746.46. The latest addition to their non-performing portfolio is Rs. 25 million. The total balance of the non-performing loan portfolio of all borrowers over Rs. 5 million, amounts to Rs 31,459,000,000. A close examination of the list released recently reveals, that political patronage has far from diminished. Amongst the list of borrowers over the Rs. 5 million limit includes several high profile corporates who have a history of being politically exposed. By far, the largest non-performing category would appear to be W.M. Mendis and Co. It is important to remember that the cross-ownership of W.M.Mendis & Co. shareholders and PTL's ultimate ownership are intertwined. Meanwhile, the EPF/ETF losses, according to the findings of the Presidential Commission of inquiry, was a staggering Rs. 8,500mn, where the potential liability, subject to court proceedings would be in excess of Rs. 17,000mn. The country was treated to the resignation of the former Defence Secretary Mr Hemasiri Fernando, from that position, post- the events of 04/21. However, information revealed via an RTI application that the former defence secretary retains a position within the People's Bank group, as does the controversial businessman Jehan Amaratunge of MTD Walker's fame. Analysts point out that the People's Bank original act was to ensure a low-risk banking facility to fund the people's projects, like agriculture, and as a safe facility to hold the general public's hard earned money. It is with this noble purpose that the People's Bank was established, but today how it is being abused by the rulers of the country is highly questionable. An analysis of the total exposure of the People's Bank, including advances made to several state-owned enterprises and favoured corporates and individuals reveals the dire straits of the People's Bank. The non-performing positions as of 31/12/2017 was Rs 19,574,000,000. In comparison to its position as at the 31st of December 2018 of Rs 31,459,000,000. Are these high-risk advances being made to deliberately push the People's Bank toward a point of no return? That would lead the government to consider the privatization of the People's Bank perhaps to people waiting in the wings. This would then fit elegantly, bringing to a conclusion what the JVP claims as the dictate of the international agencies like the IMF.