UNP says NSB’s costly $ 500 m borrowing to service debt, finance CHOGM
Friday, 13 September 2013 03:25
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Opposition Lawmaker Harsha De Silva claimed yesterday the $ 500 million loan being taken by the NSB was on behalf of the Government at an exorbitant and unheard-of interest rate, to service debt or finance the Commonwealth Heads of Government Meeting in November.
He said that it was the much-maligned UNP that had saved National Savings Bank by exposing details of a highly dubious share purchase transaction involving The Finance Company (TFC).
The NSB was attempting to purchase a large volume of TFC shares at Rs. 47 when the market price was around Rs. 35, which resulted in a major financial scandal and the reversal of the transaction once the deal was exposed by the UNP, De Silva said.
“When the market closed yesterday, TFC shares that the Government was about to purchase for nearly Rs. 50 last year closed at Rs. 9 – that is an 80% loss of value,” he charged. “NSB had a close shave and because the UNP exposed this deal, the public was spared from having to bear this loss.”
NSB maintains up to 16 million accounts, the UNP MP said, adding that the Government’s attempt to get the State-owned bank to take US$ 500 million loan at 9.25% interest was a big mistake.
The NSB Act, unlike any other banking act, binds the Government to repay loan and deposit commitments that the bank cannot meet, he said.
The UNP MP charged that by planting representatives on the boards of private banks, the Government was also arm-twisting at least two private lending institutions to obtain commercial dollar loans of US$ 250 million each.
