CENTRAL BANK OF SRI LANKA
Information Department
30, Janadhipathi Mawatha, Colombo 1.
Tel : 2477424, 2477639,2477420
Fax : 2346257, 2477739
E-mail:dinformation@cbsl.lk; information@cbsl.lk
PRESS RELEASE
Date: 09-11-2006
Issued By: Information Department
Administration Rationalization and Investigations into Prohibited Schemes
This Press Release is issued to clear any misconception that may arise as a result of a misleading
report published on Sunday, 5th November 2006 by a certain newspaper.
With the objective of rationalizing the work of departments within the Central Bank, the Monetary
Board at its meeting on Friday 25th August 2006, made several changes in the allocation of
responsibilities and duties. Accordingly, several departments/units which were hitherto reporting to
the two Deputy Governors were placed under the responsibility of the Governor while the
departments pertaining to Economic and Price Stability and the departments pertaining to Financial
System Stability were placed under the responsibility of the two Deputy Governors, respectively.
Amongst the departments and units placed under the responsibility of the Governor was the Special
Investigations Unit (SIU), which had been set up in 2005 to undertake special investigations into
alleged violations of laws relating to, and administered by, the Central Bank.
Arising from such rationalization, it was noted that there would now be additional time available
for the Deputy Governors to devote to the core functions entrusted to them. Hence, it was also
noted that they would be able to more closely monitor and direct the Assistant Governors and
Heads of Department and ensure that all work to be carried out by such departments, including
investigations, are carried out effectively. In these circumstances, the objective for which the SIU
was established could now be more effectively and economically fulfilled through the respective
departments, and therefore the need for a Special Investigation Unit under the purview of the
Governor was considered unnecessary. Accordingly, it was decided that until such time permanent
arrangements are made with Board approval, the SIU be instructed to carry out urgent and on-going
matters only. In the meantime, the Inspector General of Police had also requested that three Police
Officers who were released by the Police Department to the Central Bank to undertake
investigation work, to revert to their substantive duties in the Police Department in view of urgent
national needs.
In this background, it was decided on 14th September 2006 that all on-going investigations and
court cases should be entrusted to the relevant departments in the Bank, and that such departments
seek the assistance of the Attorney General and the Police as and when necessary.
Since then,
investigations initiated and Court cases already filed by the SIU, are being handled by the various
departments in the Central Bank in close coordination with the Attorney General and the Police.
In addition, several officers previously attached to the SIU, continue to handle these cases and
investigations in the interest of reaching a successful and speedy completion.
As already stated in the press release issued on 19th September 2006, the Central Bank wishes to
reiterate that the rationalization of the administration structure of the Central Bank has in no way
jeopardized any investigation, nor has it diluted its commitment to effectively deal with
unauthorized deposit soliciting or multi-level marketing or pyramid operations.
In fact, the
implementation of the new structure would significantly enhance the capacity and the capability of
the Central Bank to respond to any pyramid, ponzi, and/or multi-level marketing scheme,
investigations into unauthorized deposit taking institutions and/or any other transgressions that may
arise in the future. In that context, it may be pertinent to point out that the Central Bank has
recently initiated action to deal with a new multi-level, web-based ponzi scheme as well.
In the light of the above, the Central Bank wishes to categorically refute the allegations and
insinuations contained in the said paper article. The Central Bank also wishes to inform the public
that it is deeply committed to discharging its statutory obligations through the law enforcement
authorities, to bring to book any persons alleged to have contravened any of the laws and
regulations under its purview. In this effort, the Central Bank solicits information from the public
of any such activities and assures the public that necessary action would be promptly initiated to
deal with any violations of such laws.
For purpose of record, the laws under the purview of the Central Bank would include, inter alia, the
Monetary Law Act No.58 of 1949, Banking Act No. 30 of 1988, Finance Companies Act No. 27 of
1979, Finance Leasing Act No. 56 of 2000, Registered Stock and Securities Ordinance No. 7 of
1937, Local Treasury Bills Ordinance No. 8 of 1923, Exchange Control Act No. 24 of 1953,
Employees’ Provident Fund Act No. 15 of 1958 as relevant to the activities of the Central Bank,
Payment and Settlement Systems Act No. 28 of 2005, and subsequent amendments to such laws.