Government defaults Rs. 4,200 million taken to buy paddy
2011-08-29
The government is unable to purchase paddy from the Yala harvest since banks have refused to give monies for the purpose. The Banks have rejected requests made by the government for money sue to the failure to re-pay Rs. 4,800 million that was taken as a loan to buy paddy during the previous harvests.
The government has borrowed Rs. 2,367 million from the Bank of Ceylon, Rs. 1,497 million from People’s Bank and Rs. 250 million from National Savings Bank at an 8 percent interest rate. However, the banks have been re-paid only Rs. 600 million.
The government has informed the banks that the loan repayment has been delayed due to the stocks of paddy purchased at the time were still in warehouses and not sold after being converted into rice.
It is learnt that although the government has given false reasons to the banks, there were no paddy stocks in the government warehouses.
