MPs roast Central Bank Guv for outrageous annual 2.8b pay hike
Aunified parliamentary squad gave a proper roasting to Central Bank Governor Nandalal Weerasinghe and his senior staff for serving themselves to an over-the-top salary increase that will cost taxpayers nearly an extra 2.8 billion bucks per year.
Two weeks ago, in the present squalor of all-round poverty, news of Central Bank Governor Weerasinghe liberally using the proverbial spoon to serve toptier bank officials thumping 70 percent salary increments, and extra-large salary increases at an average of 50 percent to the lower order, had shocked the nation and brought his management style to public ridicule contempt.
It had unified Parliament and even made the cabinet express its collective disapproval. Even the President had not been apprised of the great bonanza the Central Bank had awarded themselves.
The knives were sharpened, the venue, date and time were set to make the Governor and his top brass run the parliamentary gauntlet.
Leading the parliamentary charge on Tuesday against the Central Bank’s top officials led by their Governor Nandalal Weerasinghe, was Opposition chief whip SJB MP, Lakshman Kiriella who succinctly summed up the national outrage: ‘You have drawn from the ‘TIN’ to help yourselves by the barrel’.
Summoned before the party leaders’ meeting and the Committee on Public Finance on Tuesday, Central Bank Governor Weerasinghe faced two charges.
It was not the calm and composed Governor Nandalal who had repeatedly preached stern sermons to the people to tighten their belts and incessantly warned that worse times were ahead. Instead, when called to justify his insensitive decision, wore the flustered countenance of one who, perhaps, inwardly knew, his flimsy defence didn’t have a leg to stand on but had, nevertheless, decided to flog it anyway for what it was worth.
His remuneration, of course, was not at issue since it would be determined later by Parliament on a date specified in his six-year contract which was signed by then-President Gotabaya Rajapaksa on 4th July 2022. Unless Governor Weerasinghe magnanimously declines, the increment, as is the norm, should be above that of his subordinates.
The first concerned the legal charge.
He was asked by Kiriella at the party leaders’ meeting: ‘What are the legal provisions that authorised you to increase salaries at the Central Bank?’
His reply was: ‘There are provisions in sections 5, 8 and 23 of the Central Bank Act for the salaries of Central Bank officials to be increased.’
But attorney-at-law Kiriella countered Nandalal’s claim by stating that ‘those sections expressly provide for Central Bank’s expenses but not for salary increases. Section 23 is about determining the amount of salaries, provided it is finally approved by Parliament. He said, the Election Commission’s independent status was enshrined in the constitution but the Central Bank‘s autonomy was not. Therefore any decision to raise pay must be subject to parliamentary approval.
Furthermore, Kiriella asserted that the new Central Bank bill presented to Parliament last year, had contained a provision for salary increases without a reference to Parliament but this was struck off the final bill, since they had been advised that a twothird majority would be required to pass it.
Did section 23 subsection (1) which empowers the Governing Board to hire and fire its employees, and to ‘determine the terms and conditions’ of their employment including remuneration, also empower them to make exorbitant pay increases? Did it vitiate the principles of fair and reasonable exercise of power? Was it tantamount to an abuse of power?
The Governor then sought to justify the decision on the basis that it was the ‘past practice for the bank to make their own salary increases.’ Now the Governor was desperately clutching at straws.
True Section 10 (a) of the Monetary Act 1950 states that the Monetary Board may fix the salaries of its employees. But wasn’t he aware that an appeal to past practices or customs no longer passed muster and was legally invalid since the Monetary Act of 1950 was expressly repealed in the new Central Bank Act’s preamble. With the repeal of the Monetary Act in September last year, all practices or customs arising from it ceased to be valid in law.
But worse was to follow with the Governor struggling in deeper waters. He told the MPs that the salaries were increased as per a collective agreement signed with the trade unions representing almost all bank employees—even the very top level of deputy governors who received a 76 percent rise to pad their already lucrative pay by an extra whopping 976,000 bucks to make a grand total of Rs. 1,728,000 per month, as revealed by Prime Minister Dinesh Gunawardane in Parliament on Wednesday.
How lovely. How cosy. How delightful. One big happy family of Central Bank employees, tightly knitted together by bonds of mutual interests to collectively raise their salaries to high heavens. How unlike other trade unions who have to fight tooth and nail to extract a feather of increase from management tortoises
And was this collective trade union agreement registered at the Labour Ministry and gazetted thereafter as all collective agreements must be to have any legal effect.
When the question was posed by MP Lasantha Alagiyawanna to Governor Weerasinghe as to whether it was registered, he could do naught but admit, it hadn’t. Clad in the armour of the new Central Bank Act, apparently those at the now autonomous Bank did not consider the normal laws of this country as applicable to them anymore.
Their collective agreement was, perhaps, in their eyes, valid and would certainly be enforceable by the binding force of mutual interest. How wonderful it must be to work in that Central Bank environment; so sprightly, so buoyant with smiling faces all around, and breathe that exuberant air, as the fragrance of newly printed crisp notes, hot off its own printing, machine, gently waft in from 9 to 5 daily.
The second charge against the Governor was the moral issue.
Even if Nandalal Weerasinghe was deemed, in his newfound autonomy, to have the right to increase salaries, did he have an unfettered right to raise increments to Himalayan heights? Especially since he, more than anyone else in the country, must know the exact depth of depression to which Lanka’s economy has descended; and how painfully slow the long process will be to raise the sunken wreck
He will surely know that countless thousands have lost their jobs, that over1500 small and medium firms have recently collapsed and their assets auctioned under parate execution, that salaries have stayed stagnant despite unbearable rises in living costs, compounded further by high electricity charges; that a vast majority of Lanka’s people live below the poverty belt, that a great number of children are malnourished, that a great and growing number of families exist barely on one square meal per day, as empirical evidence will show.
These are but a few stark examples that vividly show the grim picture of a nation in beggary. The Governor knows best how bad it is, and how worse it can get. But though possessed with this alarming grief-stained catalogue of a people’s continuing economic pain and turmoil, Central Bank officials led by the Governor, did not appear at the parliamentary showdown on Tuesday to suffer any qualms nor show remorse for using the shovel to pile their platters full.
In the midst of such squalor where poverty is rampant and teeming wretchedness blocks the gutters, for these pampered Jades of the Central Bank, with their own set of laws unequal to the rest, to be seen stuffing themselves with rich cake while the masses are starved of bread a beating at the gates, is not only indecent but downright vulgar. It jars the conscience of all decent men, sensitive to another’s suffering and pain. It is a shameful blot on the landscape.
Although the law may allow it, not all men exploit it for their own selfish advantage, without considering the equitableness of their actions.
As Sajith Premadasa told Parliament on Wednesday, one shining example is the Election Commission. He said: ‘The Election Commissioner has not a simple statutory right but a constitutional right to increase the salaries of the Commission’s members. Despite this right being enshrined in the constitution, he has never used it to increase their salaries by 70 percent.’
It should be borne in mind that not all men, holding top most posts at the Central Bank, are as scrupulous in conduct or infallible in judgment as they appear to be. It should not be forgotten that, along with the infamous Rajapaksa, the Supreme Court also found two former Governors and some members of the Monetary Board guilty of bankrupting Lanka’s economy.
Governor Nandalal Weerasinghe, in his pursuit of defending the indefensible, had the audacity on Wednesday to charge all those who had criticised his fantastic salary hikes as a grossly irresponsible lot.
He claimed: ‘Exaggerating the salary issue is a deliberate attempt to undermine the Central Bank’s independence. It could seriously severely impact the economy, potentially regressing it to its troubled state just a few years ago.’
Gosh. Is that harangue made to make us all squirm in guilt? Is it now a sacrilege to merely compare a Central Bank peon’s 223,000 buck monthly salary to a doctor’s initial salary of Rs 220,000?
Or is it the new blasphemy in town simply to ask, if it is reasonable and ethical in this gloomy economic context for a Central Bank deputy governor to receive a thumping pay increase of Rs. 976,000 bucks when the vast majority of Lankans had to make do with less than a pitiful 100,000 bucks?
Worse. We, until the Governors’ hellfire warning, had not realised the gravity of letting our loose tongues utter such profanities against the Central Bank’s pantheon of the gods: The incarnate Lakshmis of a nation’s prosperity. We have invoked their wrath and must appease their ire by holding our silence or else the terrible catastrophe of 2022 may soon return.
If it were such a heinous sin that invited damnation and hellfire that would return us to the dark ages of fuel queues, power cuts, food shortages and whatnot, we seek atonement by humbly saying, it’s only our unnatural curiousness that led us to compare the rewards in a Central Bank heaven with the pittance we receive in this Lankan hell.
Little did we know such idle chatter on increments was the sore sensitive Achilles heel in Sri Lanka’s monetary Gods of Fortune, and any envious reference to the forbidden subject could wreck their carefully laid monetary plans for the future and could, in the Governor’s words, ‘potentially regressive it to its troubled state just a few years ago.’
Heavens, what have we done? We have not breathed a word against the Central Bank’s independent status that prevents government interference in monetary policy issues but instead welcomed it. Public criticism had been confined to the inherent risk of granting a public institution the independent right to raise salaries to any exorbitant levels it wished.
Alas, it has now been revealed by no less than the Governor himself, that the sovereign right to raise salaries had been one the most important rights they had battled to gain in the war of independence.
As Nandalal Weerasinghe said: ‘Our need for the Central Bank independence in setting wages and salaries for the staff is quite important to avoid undue influence from the fiscal authorities. That was the issue earlier’.
In their triumphant hour, ah, see how they enjoy the spoils of war. No wonder they do not wish to be disturbed by passing snigger.
So sad to say but in the public eye Governor Nandalal Weerasinghe seems to have lost the sheen in his newfound armour and gone is the glint of his sword; and in the brand new autonomous Central Bank, free to run wild unchecked, the nation must dread if it has a Frankenstein Monster in the making. One cast in the same mould as the Sri Lanka Cricket Board.
And was this collective trade union agreement registered at the Labour Ministry and gazetted thereafter as all collective agreements must be to have any legal effect.