| by Ashwin Hemmathagama
( November 28, 2012, Colombo, Sri Lanka
Guardian) Deviating from its main mission to maintain economic and price
stability and financial system stability to support sustainable growth through
policy stimulus, advice, commitment and excellence, the Central Bank has
entered into a new line of business – purchasing property in foreign countries
and giving it on rent.
However, neither details of the
respective property purchases nor the rental are included in the CBSL Annual
Report, revealed United National Party MP Eran Wickramaratne yesterday in
Parliament.
“The respective purchase came up in the
audit report on Monetary Board where auditors have raised questions,”
Wickramaratne said while raising a series of questions at Ministry of Finance.
This was in relation to the lack of disclosure on the purchase of
12,000 sq. ft. floor area on the second floor of the diplomatic centre
condominium at No. 820, 2nd Avenue in New York (USA) for US$ 5,075,000 last
year in the Central Bank Annual Report for 2011.
In response, Minister of International
Monetary Cooperation and Deputy Minister of Finance and Planning Dr. Sarath
Amunugama stated that the Central Bank had significantly expanded its
operations during the recent years to increase international reserves, issue
sovereign bonds, and for investor promotions of the Government securities,
where such expansions, emerging economic activities, and foreign exchange
liberalisation were envisaged and the need for opening of offices in selected
cities were expected.
“Accordingly, the Central Bank sought
legal opinion from the Attorney General for the purpose of purchasing premises
abroad. The Monetary Board on the meeting held on 10 January 2011 approved on a
case-by-case basis having considered the opinion of the Attorney General and
the low property prices prevailing in the market. The Monetary Board also
approved renting out of such buildings to diplomatic missions of Sri Lanka at
the market rates until such times the Central Bank requires these buildings for
its own use.
“Team consisting of the Government
Valuer, senior officers of Ministry of External Affairs and the Central Bank
inspected the suitability of several buildings in New York and recommended the
purchase of this property for $ 5,250,000. After negotiating with the owner,
the purchase price was reduced to US$ 5,075,000. The Monetary Board at the
meeting held on 25 July 2011 approved the purchase of this building for the
same price on 30 August 2011. Cabinet Paper 11/2076/504/171 kept the Ministers
informed about this purchase by the Ministry of Finance on 18 October 2011.
Subsequently the respective property was rented to the External Affairs
Ministry through an agreement dated 28 May 2012 for a period of three years
starting from 1 June 2012 for a monthly rental of US$ 68,000, which is payable
in Sri Lankan Rupees. Since this is a new subject for the Central Bank, the
respective entry in the Annual Report would have not been included,” explained
Minister Dr. Amunugama.
 Deviating from its main mission to maintain economic and...){kind=link}