The Central Bank of Sri Lanka (CBSL) is stepping up efforts to curb fraudulent plantation investment schemes involving illegal deposit-taking, promising unrealistically high returns over short-term periods, CBSL Governor Dr P Nandalal Weerasinghe said according to Ada Derana’s ‘The Nightly Business Report’ programme on Monday (21).
Speaking at The Planters’ Association of Ceylon (PA) 172 Annual General Meeting (AGM) held in Colombo the previous week, Dr Weerasinghe said: “In recent years, we have observed the sector’s name, the plantation, have been subjected to fraudulent investment proposals, involving illegal deposit taking. These plantation scams promise unrealistically high returns within a shorter time period. The Central Bank is working to clamp down on these activities, leading to losses of hard-earned savings of the general public and organisations.”
According to the CBSL, informal forestry and plantation investment schemes promising high fixed or monthly payouts are classified as illegal deposit-taking, under the Financial Business Act.
These illegal setups also threaten the credibility of the country’s genuine plantation sector, due to the schemes not offering legal safety net or deposit insurance, and investors completely losing their hard-earned capital, according to the PA.
“As the initiative comes in, the Plantation Association of Ceylon must proactively collaborate with the Central Bank and legal enforcement authorities to raise further public awareness of these illegal schemes, while transforming the sector into a more productive, competitive and higher-value contributor,” he said.
Dr. Weerasinghe further added: “Sri Lanka has worked hard to restore macroeconomic stability. Therefore the next challenge is to transform stability into productivity, productivity into competitiveness, and competitiveness into sustainable value creation. The plantation sector can be an important part in that journey.”
“The opportunity here is not simply to produce more tea, rubber, coconut or any other plantation commodity, rather it is to produce products more efficiently, sustainably and with greater value, while creating better opportunities for workers, communities and also their stakeholders, those who are investing in the industry,” he noted.