Chairmen, CEOs/General Managers and other senior officials of the three state-owned banks yesterday (4th) told the Presidential Commission of Inquiry on the controversial bond issuance that former Finance Minister Ravi Karunanayake had on two occasions instructed them to bid at lower-than-market yield rates, assuring them that bids at higher rates would not be accepted.
The senior officials of the three banks also said that though they had followed the instructions given by Minister Ravi Karunanayake, the latter had failed to honour his promise that the Central Bank would not accept bids at rates higher than the yield rate range he had mentioned to them.
They said the Central Bank had accepted bids at significantly higher yield rates from other primary dealers at the Treasury bond auctions held following the two meetings in late March 2016, resulting in a notional opportunity loss to the banks.
Leading evidence before the commission, officers of the Attorney General’s Department questioned eight witnesses from the Bank of Ceylon (BoC), the National Savings Bank (NSB) and People’s Bank on events leading up to the two auctions, all of whom attested to two separate meetings chaired by the former Minister on 28th March and 30th March 2016, instructing them to bid low.
They said the meeting on 28th March was chaired by Finance Minster Karunanayake. R. Paskeralingam and former Deputy Governor of the Central Bank P. Samarasiri too had also been present.