Rs. 1,300 Mn loaned by academics not paid

Justice Minister Dr. Wijeyadasa Rajapakshe told Parliament yesterday (8) that Rs.1,300 million taken as loans from State Banks by the university academics to go abroad for higher education has not been paid back.

The Minister said that these lecturers migrated for higher education and they have failed to report back to the universities and neither the university system nor the banking system have taken steps to recover this amount. The Minister was responding to a question by Opposition Leader Sajith Premadasa saying that the children who are registered to study in Horizon campus are unable to continue their education due to non-payment of interest free loans from state banks.

Two State banks, the Bank of Ceylon and the People’s Bank, were established to boost the domestic economy of the country. During the late Prime Minister Sirimavo’s time, every agricultural institution had a Bank of Ceylon branch. Credit facilities were provided to the people of those areas for agricultural activities. Rs.602 billion rupees in inactive loans related to the third phase loans of the Bank of Ceylon and the People’s Bank.

The country has lost Rs.602 billion due to the policy followed by the two State-owned banks, despite giving loans to small and medium-sized industrialists at fair interest. Considering this, the Minister also said that the financial policies of the State banks should be greatly revised.

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