The Hon. (Prof.) Anil Jayantha
The Hon. (Prof.) Anil Jayantha stated that while direct intervention is limited, the Central Bank has authority to guide banks and financial institutions and is monitoring gaps in the system. He noted that banks may adjust to changes in statutory and policy rates with a time lag, with State banks likely to respond sooner than private banks. He added that Central Bank oversight should operate alongside market mechanisms, including money supply, demand, and the revival of economic activity.
Verbatim record (translated)
Machine-translated from Sinhala / Tamil / English¶ 01 A directive cannot be given, but there are lacunas in the monitoring system. Of course, the Central Bank is authorized to direct the banks and the financial institutions. They are doing it. We know that this is not something that happens all of a sudden. This has been observed in the past as well. So, it is being monitored gradually, Hon. Member. You know that there is a time lag involved. When these statutory rates and the policy rates are announced, the banks may not adjust accordingly. Of course, the State banks may adjust, but other banks may not. So, to some extent, the Central Bank can do that. On the other hand, we strongly believe that a proper market mechanism—demand for money, supply and the revival of economic activities—would do the rest. So, it has to go in parallel, I believe.
Provenance
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- Hansard, Saturday, 8 March 2025 ·No. 1743142289059261 ·English daily/uncorrected Hansard
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Cite as: The Hon. (Prof.) Anil Jayantha. 10th Parliament, Parliament of Sri Lanka. Hansard, 8 March 2025. No. 1743142289059261. Politick, https://staging.politick.io/lk/speeches/8221