Jan, Feb 2015 had no short falls in Government borrowings: Dy. Sec. of the Treasury

 

-The witness said he was not informed about the urgent Rs. 75 bn Government fund requirement

 

- No Finance Minister had directly communicated to CBSL over Government fund requirement: the Witness

 

By Shehan Chamika Silva

 

Incumbent Deputy Secretary of the Treasury, Sajith Attygalle  told the PCoI that the total borrowings of the Government had no short falls in months of January and February 2015.

 

Testifying by an affidavit which consisted comprehensive cash flow statements of the Treasury, he explained that there was no huge deficit between actual debt requirement and the total borrowings of the government in January and February 2015.

 

Mr Attygalle was handling the Treasury management, fiscal policy and Treasury Operation Department since 2012.

 

According to the witness, the Treasury would usually communicate the fund requirements of the Government to the Public Debt Department of the CBSL using cash flow statements of the Treasury and additionally if there is an urgent fund requirement to the Government Treasury would communicate it to the CBSL in writing.

 

It was revealed earlier that there was a request from the Finance Ministry to the Central Bank of Sri Lanka in the middle of February 2015 regarding the urgency of raising additional funds amounting to Rs. 75 billion.

 

However, Mr. Attygalle said that he was not informed by Secretary, Minister of Finance or any other government entity regarding such urgent additional fund requirement of the Government prior to the controversial Bond auction took place on February 27, 2015.

 

When SC Justice Prasanna Jayawardena questioned whether there were instances, where a Finance Minister had communicated directly to the CBSL regarding government additional fund requirement, the witness said that according to his knowledge no minister had communicated directly to the CBSL previously.

 

SC Justice Jayawardene also asked the witness that what would be the practice of the Treasury if the Government in need of such urgent money.

 

The witness explained that the Treasury could over draw the accounts of BOC and People’s Bank if there is an urgent Government fund requirement not exceeding Rs. 5-10 billion.

 

“But an amount such Rs. 75 billion could not be obtained solely from BOC and People’s Bank, therefore the Treasury would communicate the requirement to the CBSL accordingly in writing”, he said.  

 

He also confirmed that even though they communicate verbally with the CBSL, the ultimate request would be in writing.

 

The Leading evidence of the witness was conducted by Senior State Counsel Shaida Barrie.

 

The Commission permitted Counsel Chanaka de Silva who appeared on behalf of the former Governor to cross examine the witness today after analysing the documents produced by the witness.