By Chandani Jayatilleke
A senior Deputy Governor currently serving in the Central Bank is likely to be appointed to head the bank, as incumbent Governor Arjuna Mahendran has decided not to seek a re-appointment until the conclusion of investigations.
Deputy Governor P. Samarasiri is currently the front-runner for the post, top Central Bank sources told the Sunday Observer, on Saturday. The appointment is to be announced by President Maithripala Sirisena, next week.
Mahendran, last Friday, informed the Monetary Board at its meeting that he would not be seeking reappointment as Governor of the Central Bank when his term finishes on June 30, 2016 until the Parliamentary Committee on Public Enterprises (COPE) makes its findings known on issues related to the issuance of Treasury Bonds in the years 2015 and 2016.
A source close to the incumbent Governor told the Sunday Observer Mahendran is the most suitable candidate to run the Central Bank. “He is well connected with the global financial world. And his return to the country at a time of difficulty to do an extremely difficult job was a sacrifice he made in his career.”
He added that since Mahendran took up the top job of the Central Bank, he negotiated with international donors and got loans up to 4.8 billion dollars to the country. There was not enough money in the coffers to finance the reforms.
“Especially the negotiations he and the Sri Lanka team had with IMF were quiet tough. But the Governor’s involvement in talks was crucial,” the source said.
They said Mahendran would only return to the post if the investigations cleared his name.
A financial analyst said although there are allegations against the governor, no proper investigation has been done so far to prove the allegations.
However, a corporate leader said that a proper process of appointment – should follow, if the government wants to appoint a new governor at the end of Mahendran’s term.
Although some speculate that an Acting Governor would be appointed until Mahendran’s return, a senior Central Bank official said there was no provision for such a measure.
“An Acting Governor can be appointed only when the Governor takes leave or goes abroad. This is a different situation,” he said.