Friday, July 14, 2017 9:08 am  admin  1  232 

Sustaining the People’s Bank with regular injections of Public Funds

The People’s Bank is 56 years old, this month. Behind its window-dressed Balance-sheet made out of tinsel and sawdust, the truth in regard to the much vaunted “profits” in the People’s Bank is that, it is a conjuror’s trick entire, a rabbit taken out a magician’s hat. The whole thing is a diabolic deception.
From 1992 to 2016, the People’s Bank has been injected with “money” for re-capitalization, eight times, with government bonds. Bonds are but mere paper certificates and NOT hard cash that gets into the vault. They are mere decorations on the wall, signifying government guarantees upto the sum indicated. Thus, Rs. 32,222 million have been injected in eight occasions, to resuscitate the sick giant. For 25 years, the Bank has been unable to generate enough profits to redeem, any of the bonds.

The Bank actually “borrowed” another Rs. 15,000 million from the Employees’ Pension Trust Fund in 2009, through debentures. Last year, the Bank syphoned-out, Rs. 3,386 million from the same Employees Pension Trust Fund, on the false pretext, that the fund has an excess balance !

A salient question here is, what it the government does not issue Bonds to the Bank? Obviously, the Bank would not be able to function, as it does not generate sufficient profits annually to augment its capital account, when the need arises. So, despite the huge publicity that the profits of the Bank have grown to “tens of billions” the bitter truth is, without the Bonds, the Bank would be dead. Without this unceasing, continuous transfusion of blood money into the People’s Bank, it will collapse.

If anyone wants to give credit for this lamentable situation, you can give that to its present General Manager, Namasivayam Vasantha Kumar, who is still a contracted employee, taken in as a foreign exchange dealer but elevated as General Manager by the Rajapakse regime, following the colossal Hedging Fraud in which, he was directly involved. His criminal record also extends to the People’s Leasing and Finance PLC where a fraud of Rs. 3,200 million was detected by the FCID, in which, he has been named as a suspect.

Vasantha Kumar and 5 other bogus non-banking specialists who now play a pivotal role in the mismanagement of the People’s Bank are really the remnants or left-overs of a larger team of 12 “specialists” that were enlisted to the People’s Bank in the year 2000. Sponsored by the IMF, this anti-national arrangement was mothered by Chandrika Bandaranaike as the President, and fathered by Mano Tittawella, who at the time was a powerful man, wearing the Triple Crown of Chairman, People’s Bank, Chairman PERC and Chairman of BOI. He also partnered First Capital, a financial company. One dozen “specialists” led by a foreign national Derrick Kelly as CEO, was enlisted to the People’s Bank through notorious Management Services LTD., (MSL) as contracted employees Seven of them left, and a few remnants remained.

The 2015 January 8th revolution did not touch these criminals, as their real mentors, Mano Tittawella, Chandrika Bandaranaike, and the IMF, were in the Yahapalanaya saddle. They are a solid and inalienable part of the financial mafia, that continue to sap the life-blood of the nation, which is controlling, directing and sustaining the Yahapalanaya contraption.

The ostensible objective of “specialist leadership” was to expertly manage the People’s Bank but this move has become an unmitigated disaster as the statistics reveal.
Despite the so-called revamping the management, under the aegis of the IMF, regular injections of bond money has become vital to the People’s Bank to stay vertical and look respectable financially.
1992 Rs. 10,541 million – 30 year Bond @ 12% int.
1996 Rs. 10,056 million – 10 year Bond @ 14% int.
2003 Rs. 625 million – 13 years Bond @ 3.08% int.
2005 Rs. 1,000 million
2006 Rs. 2,000 million
2007 Rs. 1,500 million details not available
2008 Rs. 1,500 million
2016 Rs. 5,000 million
Total Rs. 32,222 million
This situation will continue till end of history.

The financial sector in our country is a stinking, sordid, cess-pit of corruption and frand. It has now been revealed that the Central Bank is a hot-bed and a centre of corruption, all finance companies have been smeared with fraud, the stock-market had the smell of the fish-market, and the state-banks are riddled with day-light robberies of public funds. Who can see the light at the end of the tunnel?

Ours is a doomed nation. Continued sustenance of a system of governance that beget social injustices where a small coterie of political businessmen live in luxury and unbridled enjoyment, while the majority of the rural masses live in unspeakable deprivation, poverty and squalor, speaks loudly of the collective immorality of our society.

When conditions arise, Gautama Buddha exhorted, where the majority are deprived of their basic needs, they will take up cudgels. The restlessness, that you witness in all sectors of our society today is the manifestation of the frustration of the masses when their dream of peace, orderliness, justice and fair play has been shattered brutally by a gang of well-seasoned hard-core thieves, who duped them, once again, with rosy promises.

The Rape of the Pensions Trust Fund of the People’s Bank

We bring the following facts to the public attention.

1. In the Annual Statement of Accounts for the year 2016 of the People’s Bank, there is a disclosure that, on an actuarial evaluation of the People’s Bank Pensions Trust Fund, made by Piyal S. Gunathileke, an actuarial excess of Rs. 3,386 million has been declared and that the excess amount has been transferred and absorbed into the Bank’s capital. The Bank has declared a net profit of Rs. 14,994 million.
2. Any transfer of money of the People’s Bank Pensions Trust Fund, out of the Fund, for any purpose, other than for the benefit of the beneficiaries of the Fund, who are the pensioners, is prohibited under section 3.06 of the P.T.F. Rules. Thus, this transfer-out, of Rs. 3,386 million itself is in violation of the rules and is an illegal act.
3. All published data relating to the Fund and the evidence of the Elected Trustees of the P.T.F, who are pensioned employees, indicate that there cannot be an excess of funds in the P.T.F but in fact, there is a deficit of Rs. 17 Billion, as estimated by the Elected Trustees.

These facts have been notified to the management and to the Attorney General who has to make an annual mandatory Audit, on the accounts of the People’s Bank and to the members of The Pension Fund, who number about 7000 retired employees of the Bank.

Further, beneficiaries of the People’s Bank Widows & Orphans Pension Fund, which in entirely and solely funded by working employees, have complained that the Fund is still being maintained as an internal account of the Bank and not as a Trust Fund, and that the details of the fund management, like investments, interest earned and annual accounts have not being disclosed to the membership for several years now, though these are requirements under the Bank’s own regulations.

It is clearly seen that the balance in this Fund estimated to be over Rs. 5,000 million is being misused and not properly accounted for, for several years.

An actuarial excess of Rs. 3,386 million has been declared while there is a grave on-going dispute between the pensioners and the Bank, persisting from 1996, for 21 years, of a wrongful pension reduction by resorting to the “freezing” of the Variable Cost Of Living Allowance, VCOLA, illegally, arbitrarily and unjustifiably. The cumulative effect of this freezing of the VCOLA as at present is a pension reduction of nearly Rs. 25,000/- per month, for each of the 7,000 pensioners of the bank.

Similarly since 2007, the VCOLA payable to the beneficiaries of the Wx O. P. Fund, has been freezed, thus reducing the monthly quantum of pensions substantially for 10 years now, affecting the beneficiaries.

Periodic increases of pensions, also denied

The People’s Bank has also denied periodic increases of pensions to pensioners and to widows as well, on the basis that the P.T.F cannot afford such increases. This position was take by the General Manager in August 2015, when the Pensioners’ Association officially complained to the Hon. President Maithripala Sirisena, who inquired into the matter.

However, the General Manager agreed to increase the pensions and also revise the Medical scheme for pensioners on a secret agenda drawn by him and a person named Molligoda on the basis that the pensioners should maintain total silence about all matters, thereafter. Molligoda closed the deal, was elected President of the Pensioners’ Association and the two sops were thrown at the pensioners. “Thereafter the General Manager, plundered Rs. 3,383 million from the Pension’s Trust Fund, and Molligoda is keeping mum as pledged. For 30 pieces of silver, Judas betrayed his leader, Jesus Christ, Molligoda betrayed the pensioners, wholesale.

The situation in the board of Trustees of the People’s Bank Pensions’ Trust Fund.

In terms of the regulations of the P.T.F. there are four Elected Trustees as members of the Board of Trustees as against five ex-officio Trustees, who are senior executives of the Bank. The four Elected Trustees represent pensioned employees and the current employees, two each for these two categories. Two of these Elected Trustees, Mr. S. G. G. Leuke and Mr. P. A. Dayananda have, on several occasions informed verbally and in writing to the management on certain blatant violations of the Trust Fund Regulations and also deficiencies in the Actuarial assessment which have not been based on the stipulated criteria.

Matters pointed out by these Trustees have been as follows :-

1. The monthly meeting of the Pensions Trust Fund Board, have not been held since 2015 and the Annual General Meeting of the membership have not been held for 2013, 2014 and 2015 and therefore the mandatory approval of the membership for the statement of Accounts have not been obtained. These are serious violations of the Rules, deliberately resorted to prevent protests at these meetings.
2. In 2015, only two monthly meetings of the Trust Board have been held. The last Annual General Meeting of the membership of the Fund, had been held in 2013 September and the majority of participants walked out, protesting about irregularities in the Statement of Accounts. This year, under a management sponsored leadership of Pensioners’ Association, the A.G.M. was held.
   Written complaints have been given to the management in the past by the Elected Members of the Trust Board, but, the Management had not reacted.
3. In 2015, the Bank has failed to infuse capital into the Trust Fund.
4. The Elected Trustees have assessed the short-fall due to the Trust Fund by the Bank, to be Rs. 13,000 million in 2015, due to non-compliance of the stipulated funding criteria.
5. It has been pointed out that all actuarial Assessments have been based on incorrect criteria designed to underfund the Trust Fund.
6. It has been pointed out to the Ex-officio Trustees of the Bank that it is ridiculous to show large profits in the Annual Statement of Accounts of the Bank, when the Pension Trust Fund is deficient to the extent of Rs. 17,000 million in 2015, and the Bank’s obligations have not been fully-met, on matters of Superannuation Benefits.
7. It has been pointed out that, the Trust Fund would be in jeopardy and future pension payments may be affected seriously if these irregularities continue.
   It has been pointed out to the MEMBERS that the short-fall to the Pension Fund which stood at Rs. 4,000 million by 2013, has now risen to over Rs. 17,000 million by 2015.There is a drastic aggravation of the situation by syphoning out Rs. 3,386 million, out of the Fund, on the false pretext that there in an actuarial excess in 2016.

The declaration that the People’s Bank Pension Trust Fund has an excess of Rs. 3,386 million in 2016, in a stupendous fraud which needs to be probed by the authorities in charge of the Bank’s functioning, At present, the Ministry of Public Enterprise Development is vested with authority over the state-owned Banks, and the Bank Supervision Department, of the Central Bank has some supervisory functions over the state-banks.