The Hon. Wasantha Samarasinghe

¶ 01 Mr. Speaker, this is a serious issue within the co-operative sector. There are about 300 divisional co-operative societies under which rural banks operate, as well as SANASA banks and other co-operative banks registered under Provincial Co-operative Commissioners and under the Department of Co-operative Development. While registered, there have been long-standing issues with audits and submission of reports—some not submitted for 5–7 years.

¶ 02 Serious problems arose in the banking system following pawning operations: pledged items gone missing, branches closing. Hence People’s Bank’s decision to discontinue the licence was due to such social issues. We have discussed this. Sri Lanka has about 11,000 financial institutions—banks, SANASA, and co-operative credit societies—with about 8 million members, of whom around 4 million are active. Recognizing the sector’s importance, this Government is strengthening it, including by amending the Co-operative Societies Law, bringing bank regulation under a Banking Regulatory Authority, and restoring the pawning facility to co-operative rural banks with proper regulation. The suspension by People’s Bank was due to past issues; we are working to reinstate it.