Sri Lanka’s Central Bank Governor claimed that public deposits were still safe in the country, despite fears over the state of Coloma’s already fragile economy in the wake of the coronavirus pandemic, as he threatened to take legal action against those spreading “misleading information”.

“There has been speculation by various groups and individuals that Sri Lanka’s financial system and financial institutions are in a weak position and that the general public is at risk of losing their deposits made at those institutions,” said Governor of Central Bank Prof. W. D. Lakshman, as he admitted there was a “challenging environment for the operations, not only of the financial sector but also for all types of economic activities in the country”.

He added that the Central Bank will “continue to take all possible measures to ensure the safety of public deposits”.

“It is with the cancellation of the license of The Finance Company PLC by the Central Bank recently that the speculation I highlighted at the outset has gathered pace,” continued Lakshman in his statement. “However, I must emphasize that the cancellation of the license of The Finance Company PLC and regulatory action against a few other finance companies in the recent past were done to protect the depositors and to ensure financial system stability.”

“Therefore, I would like to urge the general public not to be distracted or misled by baseless comments and malicious speculations expressing doubt about the health of our non-bank financial institutions sector as a whole.”

The governor concluded that the “Central Bank will not hesitate to take legal action against individuals and groups spreading false or misleading information with intentions of creating unjustified disruptions in the bank and non-bank financial sectors”.

See the full text of his statement here.