Pyramid scheme scourge operates under various platforms

Pyramid schemes operated illegally in Sri Lanka are prohibited under the Banking Act of Sri Lanka and it’s an offence to facilitate, market or promote any kind of involvement in it – but still these schemes exist.

“From time to time we receive information of such schemes and we look into it whether such schemes contain features of a pyramid scheme that warrants action against its perpetrators,” said Ms. T. M. J. Y. P. Fernando, Deputy Governor of the Central Bank of Sri Lanka, at a webinar hosted by the Central Bank on the topic of the “State of the Sri Lankan Economy- Challenges and Outlook” as reflected in the Annual Report 2020 last week.

“We warn the public to be wary of such schemes and the danger posed by them. Such schemes will continue as long as people get addicted to it to by losing their money. Many pyramid schemes are wrapped up with other products to show that they are not in fact pyramid products with the intention to deceive people. It is illegal for people to participate in such activity,” she added.

Governor of the Central Bank, Prof. W.D. Lakshman delivering the opening remarks said that it is not an exaggeration that economic management has been more challenging during the 2020 than the entire post- independence period. The government and the Central Bank employed all the tools to steer the economy in a totally and unfamiliar situation. The annual report of Central Bank of Sri Lanka 2020 showcases the efforts taken by both the Central Bank, the government and other stakeholders to mitigate the efforts of the pandemic on the economy and businesses under extremely trying circumstances.

Sri Lanka was able to contain the devastating COVID-19 pandemic in a well, coordinated public policy to save the livelihoods of people. The Sri Lanka economy bounced back in the second quarter of 2020 despite the destruction caused by the second wave of the pandemic that began somewhere in October. The Central Bank also provided the much needed finance to the government. Answering a question, he said the government decided not to go for an IMF programme at this juncture. But there are IMF related officers helping the Central Bank of Sri Lanka, he added.

The Director Economic Research – Central Bank of Sri Lanka Dr. Chandranath Amarasekera said the challenge of the government and the Central Bank in 2020 was to revive the economy after several years of low growth. However the pandemic caused severe hardship to the economy. Both the government and the Central Bank took policies to revive the economy. Referring to exports, he said there was a reduction of the merchandise. The Sri Lankan economy contracted in 2020 due to the COVID -19 pandemic but the agricultural sector where paddy was concerned recorded a bumper harvest along with a growth in vegetables etc. Private savings also grew by 10 per cent. The government also provided relief measures to low income groups by doling out Rs.5000 on two occasions. There was a tremendous growth in the telecom broadband sector in the first quarter of the pandemic and the trend is continuing. But earnings from exports were sluggish declining by 15 per cent.

However the US continued to be the main buyer of Sri Lankan exports followed by the UK and India. The US was responsible for 25 per cent of Sri Lanka exports, 22 per cent of imports came from China followed by India with 19 per cent and UAE with 6 per cent. But the impact of tourism was a severe blow to external resources of the country.

Answering a question, he said the government decided not to go for an IMF programme at this juncture. But there are IMF related officers helping the Central Bank of Sri Lanka, he added.