Terrorism suspects in court in Toronto and Montreal as new details of arrests emerge

CTV NEWS AND TORONTO STAR FILE PHOTO

RCMP escort Chiheb Esseghair, of Montreal, at Buttonville airport on Monday. He faces terrorism-related charges for allegedly conspiring to carry out an "Al Qaeda-supported attack on a VIA Rail train.

Toronto Star 

CANADA

The two men facing terrorism charges will be appearing in bail court in both Toronto and Montreal on Tuesday morning.

Raed Jaser, 35, of Toronto, is set to appear for a bail hearing at the Old City Hall courthouse, while 30-year-old Chiheb Esseghaier, from Montreal, has been taken back to that city for his bail hearing at 11 a.m.

Jaser and Esseghaier face terrorism charges in what police are calling the first “Al Qaeda-sponsored” plot in Canada.

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Iran denies link with Canada terror plot suspects

Tunisian-born Esseghaier, a doctoral student and engineer, had been flown to Toronto with an RCMP escort Monday afternoon.

Jaser, according to sources, is of Palestinian descent and lived in the United Arab Emirates before moving here and living most recently in a rented North York apartment.

More details have emerged about the arrest of Jaser on Monday at his place of work, a moving company.

A dozen RCMP cars speed into a Bartor Rd. business complex around 2 p.m. At least 15 police officers went into the North York Moving Company and escorted Jaser out in handcuffs. Nassir Tharani, who works next door to the moving company, saw police put Jaser in the back of a police cruiser.

About half an hour after Jaser was arrested, two plain clothed officers escorted out a woman who was carrying a folder of papers and a carton of what he said looked like documents. She was taken away in another cruiser.

He said police come to the area, just west of Highway 400, to practice driving from time to time, but he knew something was different when RCMP, equipped with a tactical unit and K-9, went into the moving company office.

“It's scary. They had their hands on their weapons and out back one of my guys said police had automatic weapons drawn and ready.”

No one from North York moving could be reached for comment on Tuesday morning.

Esseghaier was arrested Monday while sitting in the McDonald’s restaurant at Montreal’s central train station. La Presse reported he was using a computer when police swept in. They also seized surveillance tapes from the restaurant, which is just a few feet away from the VIA Rail ticket desk.

Police allege the case had ties to Iran although denied it was state-sponsored.

With files from Andrew Livingston

Terror plot: Toronto Muslim leader tipped off RCMP: CBC

CHRIS YOUNG / THE CANADIAN PRESS

A RCMP officer stands outside the Toronto home of one of two men accused of plotting a terror attack on a VIA Rail target. (April 22, 2013)

Toronto Star 

CANADA

By: Thestar.com, Published on Tue Apr 23 2013
A “prominent community leader” among Toronto Muslims tipped off the RCMP to possible terror suspects, the CBC reports.

A “prominent community leader” among Toronto Muslims tipped off the RCMP to possible terror suspects, the CBC reports.

And the Mounties gave GTA’s imams a “special briefing” Monday before announcing the arrest of two men in an alleged plot to derail a VIA passenger train, one community leader told the CBC Tuesday morning.

“It was a sense of thank you as well as a reconfirmation of our collaborated efforts for the safety of the country,” Yusuf Badat, director of religious affairs for the Islamic Foundation of Toronto, told the CBC’s Matt Galloway onMetro Morning.

The RCMP did confirm an imam gave them information that led to the arrests, although “not too many details were shared. They did say a prominent community leader has come forward.”

Badat didn’t know which imam tipped off police.

Is there surveillance in Canada’s Muslim communities in general and had there been specifically of the two men arrested?

Yes, said Badat, there is “informed surveillance” but he didn’t know of any surveillance of the two suspects.

Within a religious community, imams have kept an eye out for radicalization, Badat said.

“We would not hesitate at all in informing the agencies to do their part. As Canadians, we share the concerns. We are equally affected by any terrorism threats.”

Since the terrorist attack on the United States on Sept. 11, 2001, he said, “the community has been co-operating with the RCMP in the best interests of the country.”

How has that played out?

“Many times we have been at the RCMP facilities and the government agencies for input, for sensitivity training,” said Badat. In turn, Mounties are invited visit mosques and community centres so Muslims in Canada “get a sense of how we can communicate and how we can contribute in the best interests of the country.”

Badat said he wasn’t too concerned about a backlash against Muslims because of these arrests because he was confident Canadians “are a great people” and can distinguish the many non-radicals from the few radicals.

The role of imams, he said, is to “motivate our congregations that we are not to be blamed but we have to do our part.

Mr.Kalayanasundaram worked as a Librarian for 30 years. Every month in his 30 year experience(service), he donated his entire salary to help the needy.

Ram K Umar-Tuesday, Apr 23 2013

Follow · April 1 

Mr.Kalayanasundaram worked as a Librarian for 30 years. Every month in his 30 year experience(service), he donated his entire salary to help the needy. He worked as a server in a hotel to meet his needs. He donated even his pension amount of about TEN(10) Lakh rupees to the needy.

He is the first person in the world to spend the entire earnings for a social cause. In recognition to his service, (UNO)United Nations Organisation adjudged him as one of the Outstanding People of the 20th Century.. An American organisation honored him with the ‘Man of the Millennium’ award. He received a sum of Rs 30 cores as part of this award which he distributed entirely for the needy as usual.

Moved by his passion to help others, Super Star Rajinikanth adopted him as his father. He still stays as a bachelor and dedicated his entire life for serving the society.

We all Indians should be PROUD. UNO has honored him but we Indians don't even know that such a personality exist amongst us.

At least have the courtesy to pass this on and on till the whole world comes to know about this Great Good Samaritan.
Man of the Millennium.....
Hat's off Kalayanasundaram.. We Indians are extremely proud of you and proudly say "EVEN THIS , HAPPENS ONLY IN INDIA"

BBS, Right To Marry Four Wives And Racism As A Political Tool

By Chandra Kumarage -April 23, 2013

Chandra Kumarage

“Our true nationality is mankind” – H.G.Wells.

The government of President Rajapakasa is vexing eloquent that his, is a government under which democracy thrives and the rights of all peoples in the country are protected irrespective of their ethnicity, religion and language.

But what the whole world witnesses is something different. Fanatically racist forces are committing racist crimes either under the protection or acquiescence of the law enforced organs of the government and sometimes being aided and abetted by them. It was reported a few days ago in the media that a recent peaceful candle light vigil by a civil society organisation against the racist and antireligious activities of the Bodu Bala Sena had been dispersed by the police acting together with the BBS. Instead of dispersing the racist mobs the police gave them protection and took the some lawful protestors into custody. Who gives this strength and impunity to the extremist forces? How can they act the way they did in violation of the law of the land? We must remember that this tolerance of racist acts by extremist organization is perpetrated by a government which disperses the lawful and democratic dissent by the working class and civil society organisations in the country by using force and sometimes even by obtaining illegal court orders by misleading judges. No one will ever forget the way how brute force of paramilitary outfits and the police and armed goons was used to disrupt the peaceful and democratic campaign of lawyers against the universally condemned, illegal and unconstitutional impeachment and removal of the Chief Justice.

The fundamental rights to equality, conscience, and religion in the constitution of the country do not contain a proviso making Sinhala Buddhists more equal than others and that they are at liberty to attack places of worship of other citizens of the country and, commit mischief and damage to the properties and business places of those who profess other religions.

How can a government which condones and encourages such unconstitutional and outrageous acts say that they are protecting and fulfilling the rights of all Sri Lankans without any discrimination?

Racism is a peremptory norm of international law from which no derogation has been permitted. It is the duty of governments to enforce appropriate and effective legislation to prevent acts of racism, racial discrimination, xenophobia and related intolerance and promote a “cultural of prevention and tolerance” and not a “cultural of reaction.” What Governments must do is to bring to justice the perpetrators of crimes motivated with racism and xenophobia and not encourage those crimes for their political advantage. In Sri Lanka those who indulge in acts which amount arouse racism are made punishable under by the ICCPR Act of 2007 of Sri Lanka. One wonders as to why this law has been put to the backburner by the government and law enforcement authorities. This law enacted by this government has made provisions for the indictment and trial of those persons who arouse racism adopting new forms, including tendencies to establish policies based racial, religious, ethnic, cultural and national superiority and exclusivity.

It must be stated that so called extremist organizations have no right to victimize anyone to protect the teachings of the Buddha. Buddhism as it is used is not an ‘ism,’ meaning a religion. Buddha Dhamma in essence is diametrically opposed to religion. It calls upon its followers to train the mind, to abandon all attachments and aversion, and pursue compassion with indiscriminate detachment. Does anyone need a Balasena(armed force) to achieve those goals.

Dilanthe Withanage supposed to be the organizer of the BBS is reported in the media as saying that they are fighting for a single legal system in the country. He has stated further that,”if a Muslim has the right to marry four wives (not four women ) let the Buddhists also have that.” By that statement Withange has betrayed his claim to be a Buddhist. What he is campaigning for is not for the “protection or preservation of Buddhism” or to adhere to Buddhist tenets but a craving to acquire an un-Buddhist right unto himself which is not found in the basic teachings of the Buddha. This exposes the bona fides of the BBS and their Budhistness. Firstly if they have no anti-Islam agenda but only to win over the right enjoyed by the Muslims to marry four women, why are they attacking Muslim places of worship and commit mischief on the businesses houses of the Muslims? What they must do is to lobby the government of Sri Lanka to enact legislation to repeal the landmark judgment of the Supreme Court in the case Abeysundara v. Abaysundara which struck down multiple marriages by non-Muslims in Sri Lanka by embracing Islam. It must be stated for the information of Withanage that even in India, the High Court of Kerala has recently held against multiple marriages even by Muslims except under exceptional circumstances.

Withanage also denies that the BBS is having an anti-Islam agenda–his group wanted “only for Buddhism to get credit for building up Sri Lankan civilization. Other religions can still be practiced” he said. It is very clear that Withanage and his colleagues have no knowledge of the essence of Buddhism and the history of Sri Lanka. It is true that the Sinhala language, arts and crafts and culture developed with the advent of Buddhism to Sri Lanka. But all that came from India. The Sinhala language that we speak evolved from the Prakrit language and Ardha Magadhi dialect of India. It is an accepted fact that the Buddha preached his Dhamma in all dialects of Northern India from the Present Bangla Desh, Bihar and a part of Utter Pradesh.The architecture, sculpture and other arts and crafts also had been introduced to India after the invasions of Greeks. The Gandhara School of Arts originally introduced those to Indian architecture, sculpture arts and craft later spread all over India. Hindu Kings of the Gupta Empire who followed the Gandhara tradition began the erection of the statues of Hindu deities according to that tradition, which was emulated the Kings of Sri Lanka. The reason for the absence of any statues of the Buddha during the Asokan era proves this fact. It is difficult to understand as to how Buddhism can claim the full credit for building of the civilisation of Sri Lanka as Withanage claims.’ It has to be accepted that all other religions and professed in Sri Lanka and their cultures have enriched the civilization of Sri Lanka.

Out of many definitions to the term ‘civilisisation’ what has been given in the Dictionary of Political Science by Joseph Dunner which is more acceptable, civilization means “The some total of intellectual, aesthetic, technological, and spiritual attainment of a particular society.” Mr. Withanage I may be well advised invite to apply this definition or any other definition of his of choice to state whether the civilization of Sri Lanka belong to Buddhists alone or to all peoples professing a multitude of religions

It is obvious that building civilizations was not the purpose of the Buddha Dhamma. Moreover violence, animosity, anger, revengefulness, bloodletting, and killing to protect the Buddha Dhamma is not found in the discourse of the Buddha. Buddha himself had exhorted that whoever seeks refuge in the Dhamma (the teachings of the Buddha)will be protected by the Dhamma which connotes that there is nothing in the Dhamma to be protected by anyone but the Dhamma will protect all who seek refuge in the Dhamma.

In addressing the Human Right Council’s debate on racism racial discrimination , xenophobia and related forms of intolerance on September 9 2102 the Sri Lankan delegate has stated inter alia that “as a people of a country which has recently emerged from a thirty year protracted terrorist conflict, it was actually aware of the manner in which racial and other monolithic ideologies could be manipulated by extremists seeking to foster fascist and separatist agendas and endanger hatred and intolerance, which pose a threat to the sovereignty and territorial integrity of Sri Lanka. This made it more cognizant of the importance of celebrating shared cultural heritage and consolidating peace whilst denouncing racism and related intolerance.” What is happening on the ground in Sri Lanka is entirely different to what the government’s delegate has stated above. Instead of “celebrating shared cultural heritage” the authorities are condoning and even indirectly encouraging anti-religious and racist statements and activities perpetrated by extremist organizations like the BBS and RB.

BBC reported that the BBS has top-level support. According the said report President’s brother the Defence Secretary Gotabhaya Rajapaksa had been the guest of honor at a ceremony to open a new BBS training school.

Last week armed men stormed the Press of the Uthayan , a news paper that had recently been critical of the army taking over land in the country’s Tamil majority north which the military has denied. But the unanswered question is as to why the law enforcement authorities are unable to identify and arrest the perpetrators of this crime committed in an area with a very heavy armed forces and police presence.

The dominant mood of the country is one of triumphalism even four years after crushing of the Tamil LTTE, which has encouraged the triumphant Sinhalase to bring the other principal minority community before their knees. The regime feels relieved by this mood of the majority Sinhalese whose staple these days is has been triumphalism which has given them an added appetite for disserts like religious intolerance and racism. Soaring prices of commodity items and gasoline and massive increase of electricity tariffs and erosion of their freedoms are not their concern.

I wish to conclude by quoting the great German thinker Arthur Schopenhauer, “every miserable fool who has nothing to all of which he can be proud of adopts as a last resource the pride in the nation to which he belongs; he is ready and happy to defend all his faults and follies tooth and nail, thus reimbursing himself for his own inferiority. This is exactly what is happening in our country Sri Lanka.

Rs. 9 million donation to satisfy SLPA Chairman’s aspirations

Monday, 22 April 2013

Chairman of Sri Lanka Ports Authority (SLPA), Priyath Bandu Wickremamuni who hails from an ordinary family in Embilipitiya was educated at the Embilipitiya Central College and received his degree from the Moratuwa University. He has joined the Royal Colombo Golf Club to uplift his social status and has donated Rs. 9 million to the club for its avurudhu festival.

The sum of Rs. 9 million was paid through two cheques. It was well known racketeer and SLPA Managing Director, Captain Nihal Keppetipola who had helped Wickremamuni to get a membership at the Golf Club. Keppetipola is also a business partner of the SLPA Chairman. It was the SLPA that had funded the Rs. 200,000 membership fee of the Golf Club for the Chairman.

Wickremamuni is trying to cover his village background by becoming a member of the Golf Club and has also spent SLPA monies for cricket as well. He spends the Authority’s monies amounting to Rs. 2.5 million every month on the SLPA cricket team. His intention is to enter the Sri Lanka Cricket board by playing first 11 cricket at national level.

Although he had supported the game of Volleyball in the past, his dream of climbing the social ladder has now pushed him to support games like golf and cricket that have large numbers of sponsors.

After being born to an ordinary family in Embilipitiya, this person has now built a house similar to a palace in Rajagiriya. The cost to build the house had been footed by a construction company that does business with the SLPA.

His friends have found it hilarious that he has dropped the “muni” part in his name Wickremamuni in order to change his caste before changing his social standing. He now identifies himself as Dr. Priyath B. Wickrema. There’s a separate story about how he purchased his PhD in London.

Afghan interpreters could be offered relocation to Britain

David Cameron expected to make decision on Tuesday affecting up to 1,100 who risked lives helping UK forces in Afghanistan

Sunday 21 April 2013 

An Afghan interpreter covers his face. Interpreters could be in grave danger from reprisals once Nato forces leave Afghanistan in 2014. Photograph: John D Mchugh

Hundreds of Afghan interpreters who have risked their lives working with UK forces in Helmand province could be offered relocation to Britain this week when David Cameron reviews the issue at a meeting of the national security council.

The prime minister has been given three broad options and is expected to make a decision on Tuesday that could affect up to 1,100 Afghan nationals – including more than 600 interpreters, who could be in grave danger from reprisals once Nato forces leave Afghanistan in 2014.

The most comprehensive option involves offering a relocation package similar to the one given to local interpreters after the Iraq war.

But two cheaper ideas also being considered include offering the interpreters a series of "economic incentives" to remain in Afghanistan, and requiring them to apply for asylum in the usual way, without preferential treatment.

This would infuriate campaigners, who have argued the interpreters must be given immediate special status as a reward for the dangerous work they have undertaken.

Twenty interpreters have died since 2001 – five were abducted and murdered by insurgents. Dozens of others have been wounded. The US, Canada, Australia and New Zealand have all granted Afghan interpreters the right to asylum.

The Taliban has declared a death sentence on all Afghans working with Nato forces in the country, and some members of the national security council have privately expressed fears the UK will look miserly, and lacking in compassion, unless the interpreters are given the option to live in the UK.

The interpreters are paid well compared with most Afghans – about £1,000 a month – but the cash cannot protect them from revenge attacks.

"You can offer the interpreters every economic incentive in the world to stay in their own country, but that isn't going to remove the threat posed to them," said one Whitehall source.

Last week senior military figures and politicians joined calls for the interpreters to be offered asylum, saying the country had a "moral obligation" to protect them.

In an open letter, the former Liberal Democrat leader Lord Ashdown and General Mike Jackson, head of the army during the Iraq war, said: "The British military's job in Afghanistan would have been impossible without local interpreters, who have risked their lives and made extraordinary sacrifices just like British soldiers.

"After the Iraq war the UK gave Iraqi interpreters asylum in this country, but – shamefully – Britain is the only Nato country yet to do this for Afghan interpreters."

Though the Foreign Office has promised to help the interpreters, there has been criticism of the scheme offered to Iraqi interpreters, which defence officials have said "is expensive and complex to administer".

But in the latest Commons defence select committee report on Afghanistan, Mark Sedwill, a former director general for Afghanistan and Pakistan at the Foreign Office, said it would be possible to repatriate staff and for them to start a new life.

"We employ a vast number of interpreters and highly skilled people within the [Nato] mission. As we have seen elsewhere, if given lump sums and the right kind of training, they can come out and start setting up businesses of their own," he said.

The Sinhala-Buddhists, The Cost Of The Army And The Tamil people

By R.M.B. Senanayake -April 22, 2013

R.M.B Senanayake

The Government must win over the Tamil people to preserve democracy and the territorial integrity of the State as one nation.

In a democracy the State must obtain the willing consent of the people. The people include not only the majority religio-ethnic group however large such group is. The Sinhala Buddhists constitute 70% of the population but that leaves out 30% who will be a permanent minority. Majority decision-making does not permit the violation of the fundamental rights given to all citizens by the Constitution. These are not alterable for they are not given by the State but are the inherent rights of individuals irrespective of their affiliation to any race or religion.

But recent changes in the the law and the Constitution have meant the removal of fundamental doctrines like the separation of powers, checks and balances, independence of the Judiciary from the Executive and the Rule of Law which requires the law to be enforced equally against all citizens- rich or poor, politicians or citizens, soldiers or civilians. Without these institutional safeguards there can be no protection for the fundamental rights of citizens.

There cannot be groups of people in a State who are permanently alienated or estranged. The State is an abstraction and it is represented concretely in the form of the ruling political party or parties. The present regime has been co-opting the minority political parties by dispensing political patronage. But the Tamil National Alliance which represents the majority of the Tamil people, will not be co-opted for such considerations at least not until the rights of their people are respected and upheld by the government. The Government has mobilized a few Tamil politicians to bolster their claim of representing the Tamils. But this farce will not go down with the International Community. The Sri Lankan state can presently claim only the consent of the majority Sinhala Buddhists. In fact other ethnic and religious minorities are also complaining. The Tamils have complained for the last fifty years that they have been discriminated against on language, education, jobs and civil liberties. They allege discriminatory enforcement of the law against them. They fought a long and bitter war for setting up a separate State for themselves in the North and East. They did so after peaceful negotiations for devolution of power had failed over a period of 30 years. Unfortunately their armed struggle was characterized by terrorist acts against civilians including Buddhist monks and religious places of worship. This helped the government to mobilize the majority community behind it to wage a relentless war. It also helped to mobilize the support of the Western countries which had subscribed to the UN Charter in 1945. So they too assisted the government by banning the LTTE, preventing them from collecting money from the expatriate Tamil community in their countries and by providing war intelligence which effectively blocked the LTTE from obtaining weapons from overseas. The LTTE was roundly defeated in May 2009 and the territorial integrity of the State was restored.

But democracy requires that the consent of the Tamil people be obtained. It was necessary to look into and remove the grievances of the Tamil people which drove them to take to arms. So the Government appointed the LLRC which looked into Tamil grievances and made recommendations. But the Government has been dragging its feet in implementing these recommendations. Instead the Government has concentrated on development- demining the area making it safe for the internally displaced to return and spending money to restore the infrastructure. The Government has shown distrust of the Tamil people and deployed a large military in the north. Instead of winning the willing co-operation of the Tamil people the Government has sought to suppress any expression of political opinion by the Tamil people. The Army is accused of supervising the civilian administration and monitoring the behavior of civilians depriving them of the usual freedoms of expression permitted in a democracy. The internally displaced complain that their original lands have been taken over by the Armed Forces as Security Zones.

The Army is accused of running a police state to control the Tamil people monitoring civilian behavior and intruding into their private lives, presumably to oppose what they consider as Tamil nationalism. So the elected representatives of the Tamil people complain that their party offices have been attacked and that they are being harassed by ‘unknown’ assailants. The Tamil press has been vandalized. Whatever the purpose of these acts of violence they will only nurture popular fears and make both the Armed Forces, the government and the Sinhalese terribly unpopular and strengthen opposition to the State. Man does not live by bread alone says the Bible. The Tamil people want to be treated as equals and enjoy the fundamental freedoms guaranteed in the Constitution. They want to live their lives without harassment. It is the duty of the State to provide them security and any State that fails to provide such security for life and limb and the fundamental freedoms of a free people loses its moral right to exact obedience from its subjects. History seems to be repeating. In 1956 the Tamil ‘Satygrahis were attacked with impunity on the Galle Face Green and later outside the Jaffna Kachcheri. Several attempts to win Tamil rights through non-violent means such as ‘satyagraha’ were treated with contempt by the majority Sinhala Buddhists. Successive agreements entered into with the Tamil political parties by Sinhalese political leaders were reneged.

The UN recognizes that all people must be treated equally by the State irrespective of ethnicity or religion. The UN even recognizes the right of a “nation” to self determination with sovereignty and territorial integrity although there is no agreement on either what constitutes a nation or how self determination should be exercised- whether by independence, federation, protection (Kurdistan) or some form of autonomy. Whether Tamils constitute a nation or not the right to some form of devolution of power has been accepted and incorporated in the Constitution under the 13th Amendment.
The Government will have to win over the consent of the Tamil people by allowing them to elect their representatives freely and fairly and allow the Provincial Council of the North to function without undue interference from the Army. The Army would have to be confined to barracks and law and order enforced by the Police. The local Police would have to be accountable to the Provincial Council at least for the normal police functions of crime prevention and investigation although some role for the national police need not be excluded as in a federal state. Otherwise the demand for self determination will echo and re-echo across the Palk Strait until it is given ear to by the UN. The unification of the territory through war has to be accompanied by unification of the hearts and minds of the people of the North with the rest of the country. We cannot afford to run a large army as the economic cost is too high. Time will show that the financial burden of the Army cannot be carried by a State running a massive budget deficit. It is difficult to increase government tax revenue and expenditure affecting public welfare cannot be cut. The cost of the Army can be reduced if there is reconciliation with the Tamil community.

“We will finally have only friends. Not politics” – President tells Mangala

Sunday, 21 April 2013

President Mahinda Rajapaksa had telephoned former Foreign Minister Mangala Samaraweera today (21) on his 57th birthday to wish him and said, “Mangala, you are one of my oldest friends. We have our differences in politics. But what will finally have will be our friendship and not politics.”

Since wishing people for their birthdays is one of the President’s key daily tasks, he had made several attempts to contact Mangala from morning to wish him for his birthday. The President had though that Mangala was avoiding his telephone calls due to the difficulty in getting through to him.

Not willing to give up, the President had the telephoned former UNP Chairman, Malik Samarawickrema. It was the President who had informed Malik that today is Mangala’s birthday.

Malik had then telephoned Mangala and said the President had been trying to contact him from morning. The President had telephoned Mangala a few minutes after Malik’s call. Mangala’s telephone battery had died soon after the President had wished him for the birthday. Mangala had then re-fixed the battery and returned the President’s telephone call. The President had said, “I thought you disconnected the line because you are angry with me.”

The President after having a brief chat had asked Mangala, “So, who is coming for your party today?” Mangala had responded saying there was nothing special and that his good, old friends would be visiting him today.

“I’m your oldest friend Mangala. Although we are now distant due to politics, our friendship will remain till the end, not politics,” the President had said. Mangala had remained silent and not responded to the President’s comment.

Banks give govt. Rs. 95bn in new loans, private sector gets only Rs. 17.4bn

April 21, 2013, 

Latest data released by the Central Bank shows that government crowding out of the private sector has eased in February with the government borrowing Rs. 95 billion during the first two months of this as against Rs. 17.4 billion by the private sector.

New private sector loans from the domestic banking sector grew by Rs. 12.1 billion in February 2013, as against Rs. 5.3 billion in January, while government borrowings from domestic banks grew by Rs. 39.6 billion in February, as against Rs. 55.4 billion the previous month.

New private sector borrowings from the domestic banking sector amounted to Rs. 17.4 billion during the first two months of this year, as against a massive Rs. 95 billion borrowed by the government.

The Central Bank cut monetary policy rates in December 2012, unchanged since then, but this has failed to bring down interest rates in money markets and spur private sector led economic growth because of the government’s high domestic borrowings.

"…with expected adjustments to administratively determined prices and continued fiscal consolidation, the reliance of the public sector on bank financing is expected to decline in the coming months," the Central Bank said last week releasing the Monetary Policy Review for April 2012.

"The resulting availability of funds, together with foreign capital raised by the banking sector in recent months would provide the necessary stimulus to strengthen private sector activity," it added.

Government borrowings from the Central Bank fell by Rs. 21.2 billion in February after falling by Rs. 12.5 billion the previous month.

Total outstanding private sector credit from the domestic banking sector grew by 14.2 percent year-on-year to Rs. 2,189.5 billion as at end February 2013, falling from a 16.4 percent growth rate a month earlier and 37.2 percent a year earlier.

Total outstanding credit from foreign banking units amounted to Rs. 196.6 billion, up 4.2 percent from a year earlier.

Total outstanding credit of public corporations from the domestic banking sector surged 73 percent year-on-year to Rs. 95.2 percent as at end February, while credit from foreign banks grew 25.4 percent to Rs. 204.8 billion.

Total outstanding credit to the government grew by 15 percent year-on-year to Rs. 1,115.4 billion: outstanding credit from domestic banks grew 35.9 percent to 729 billion; credit from foreign banking units fell 24.6 percent to Rs. 141.3 billion while Central Bank credit fell 23.4 percent to Rs. 245.1 billion.

Economists and analysts have said easing monetary policy would be challenging this year with growth not expected to near 7 percent this year despite the 7.5 percent forecast issued by the Central Bank.