Part II
Accounts and Operations of the Central Bank of Sri Lanka
outstanding against the bank as at 31 December 2010. No provision has been made, as the bank is of the opinion that it is unlikely that any significant loss will arise.
and liabilities on behalf of government, trusts, retirement benefit plans and other institutions. The significant trust activities performed by the Bank are as follows: a)
The bank handles disbursements and repayments of various foreign loans and, grants under foreign funded development projects and credit schemes on behalf of the Government of Sri Lanka (GOSL). It also collects counter party funds under various foreign loans and grants on behalf of GOSL and invests such funds in treasury bills on requests made by donor agencies.
b)
Bank is the custodian of the Employees Provident Fund (EPF). In terms of the statute, the functions of the Monetary Board consist of receiving contributions, surcharges, income from investments, maintaining proper accounts of registered members of EPF, investing surplus funds and payment of benefits to the members.
c)
Bank administered the Deposit Insurance Scheme, which was a voluntary deposit insurance scheme open to banking institutions licensed by the CBSL and cooperative societies registered under the Cooperative Societies Law No 5 of 1972, which carry on banking business & with effect from 01st October 2010 funds have been transfered to the Sri Lanka Deposit Insurance scheme which was formed as per gazette no:1673/11 -28 September 2010.
d)
Bank carries out regulatory and supervisory functions in respect of registered finance companies (FCs) and attends to related matters under the authority delegated to it by the Monetary Board. While carrying out such functions, with respect to failed FCs, various actions are taken, including the vesting of assets of persons responsible for the unviable and insolvent condition of such companies, with the Monetary Board as a form of security.
e)
As per the gazette no:1673/11 dated 28th September 2010, bank has established a Mandatory Deposit Insurance Scheme, namely Sri Lanka Deposit Insurance Scheme w.e.f 01st
39.5 Commitments a)
As at 31 December 2010 the bank has capital commitments of Rs. 54.134 Mn (2009 – Rs. 51.230 Mn), in respect of the acquisition of Property, Plant and Equipment.
b)
As at 31 December 2010 there were no outstanding Forward exchange transactions and in the year 2009 Bank has entered into Forward contracts amounting to USD 245 Mn & JPY 0.5 Mn.
39.6 Assets Pledged In order to facilitate the securities settlement process, AUD 39 Mn & GBP 10 Mn (carrying value AUD 21.096 Mn & GBP 10.031 Mn) worth of securities (2009– AUD 39 Mn & GBP 10 Mn -carrying value -AUD - 36.953 Mn & GBP 10.223 Mn) have been pledged by the bank to the Euro Clear Bank and obtained a credit facility of USD 35 Mn (2009 – USD 35 Mn). The pledged securities are held in a separate account at the Euro Clear. 39.7 Contingent Residencies
Liability
against
Sovereign
As per the lease agreement entered between the Monetary Board of the Central Bank of Sri Lanka (CBSL) and S.W.R.D.Bandaranayake National Memorial Foundation to operate Sovereign Residencies, the subsequent investments made by the lessee to the premises should be agreed by both parties and be recorded. In the event the agreement is terminated the CBSL, as the lessor would have to pay an agreed percentage of the value of the investment based on the year of operation. At the end of the December 2010 the contingent liability of the CBSL as the lessor is estimated at Rs. 21.932 Mn (2009- Rs. 26.319 Mn) being the 50% of the investment value considered at the end of second year of operation.
40. Trust and Custodial Activities Bank commonly acts as a trustee and in other fiduciary capacities that result in the holding or placing of assets Central Bank of Sri Lanka Annual Report - 2010
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