“Challenges and Controversies: Inside the State Bank’s Financial Struggles”
The General Manager of the State Bank’s Financial , Thushara Asuramanna, recently addressed employees and trade union members at a public meeting to shed light on the challenging situation facing the state bank. He recounted instances where attempts to recover loans were met with interference, even from high-ranking government officials.
State Bank’s Financial
As tensions rose over State Bank’s Financial demands for New Year bonuses, employees gathered at the head office in Kollupitiya, prompting Asuramanna to intervene. He convened a meeting in the auditorium to explain the bank’s financial woes, which have led to losses amounting to nearly Rs 500 million.
Addressing the issue of bonuses, State Bank’s Financial Asuramanna emphasized the substantial funds required, citing the bank’s history of financial struggles. By mid-2022, outstanding loans had reached approximately Rs 50 million, compounded by rising interest rates, resulting in a surge in costs to about Rs 21 million by the end of the year. The bank incurred an operating loss of around Rs 48 million in 2022, which escalated to a total loss of about Rs 500 million by 2023.
The GM attributed the bank’s failure to external factors and inadequate adherence to banking procedures rather than employee shortcomings. He acknowledged delays in pursuing legal action to recover outstanding loans, citing instances where debtors had promised to liquidate assets to settle debts. However, audits and inquiries by regulatory bodies, including the Audit Committee on Public Enterprises (COPE) and the Central Bank, have raised concerns over the bank’s recovery efforts.
Asuramanna disclosed that certain loans were extended to influential individuals, including relatives of former politicians, many of whom delayed repayments. The onset of the COVID-19 pandemic further complicated the recovery process, with some borrowers granted moratoriums.
The bank faced scrutiny from parliamentary committees over its failure to recover funds lost in a loan scam dating back to 2017, with the COPE highlighting significant delays in the recovery process. Despite directives from regulatory bodies, the bank grapples with challenges in reclaiming outstanding debts, necessitating urgent corrective measures to salvage its financial stability.
