Category: Daily Financial Times

The mother of former State Intelligence Service (SIS) Director Major General (Retd.) Suresh Sallay yesterday made an emotional appeal for compassion towards her son, as she addressed an ongoing Satyagraha opposite the Fort Railway Station.

Speaking to supporters and the media, she condemned what she described as the treatment being meted out to Sallay and his family, while expressing confidence that the truth regarding the allegations against him would eventually emerge.

‘I am not merely praising my own child. Go to Nugegoda and ask the people how much they love him. If the public loves him that much, imagine the pain of the mother who gave birth to him. I may remain silent, but there is a fire burning inside my heart,’ she said.

She said the public’s affection towards her son reflected the service he had rendered to the country and the sacrifices made during his career.

Referring to the allegations levelled against Sallay, she said she had placed her trust in God.

‘I have been a believer all my life. I pray every day and leave my son in God’s hands. God knows everything about him,’ she said.

She also defended the role played by intelligence officers in safeguarding national security, stating that many of their contributions were carried out away from public attention.

‘People can walk freely today because intelligence officers provided the information needed to protect this country. My son never sought publicity. He worked silently from the shadows and carried out his duties,’ she said.

Speaking about the impact of her son’s detention on the family, she said she continued to struggle emotionally with the situation.

Condemning what she described as the manner in which her son was being treated, she added: ‘This is a sin that even God and the Buddha will not tolerate.’

The Satyagraha opposite the Fort Railway Station has drawn supporters calling for action in relation to Sallay’s case. Authorities have not publicly responded to the remarks made at yesterday’s protest.

The Women Parliamentarians’ Caucus has called for faster investigations and stronger institutional coordination in the high-profile child abuse case involving a girl from Anuradhapura, while urging authorities to take steps to minimise further trauma to the victim as multiple court proceedings continue.

The Caucus, chaired by Women and Child Affairs Minister Saroja Savithri Paulraj, met in Parliament on 5 June with representatives from the Attorney General’s Department, National Child Protection Authority (NCPA), Department of Probation and Child Care Services and Sri Lanka Police to review the progress of investigations and discuss next steps.

During the meeting, the Caucus instructed relevant authorities to ensure that all investigations are conducted strictly in accordance with court orders and requested that forensic and medical reports related to the case be obtained without delay.

Given that legal proceedings linked to the victim are currently being heard in courts in Anuradhapura, Attanagalla and Dambulla, the Caucus requested the NCPA to closely monitor all three proceedings and take measures to reduce the psychological burden placed on the child through repeated involvement in separate cases.

The Attorney General’s Department also agreed to a request from the Caucus to appear before the Anuradhapura Magistrate’s Court to facilitate legal proceedings and strengthen coordination among State institutions involved in the case.

The Department of Probation and Child Care Services was instructed to continue monitoring matters relating to the child’s education, health and safety.

The Caucus further stressed the need for stronger coordination among law enforcement and child protection agencies handling child abuse cases and agreed to pursue future interventions aimed at improving institutional cooperation.

Members also decided to develop guidelines governing media reporting and judicial proceedings relating to child abuse cases to ensure the privacy, security and dignity of affected children are protected. A subcommittee operating under the Caucus will oversee the process and also examine legal and practical challenges arising in child abuse litigation.

Among those attending the meeting were Deputy Chairperson of Committees Hemali Weerasekara, MPs Hasara Liyanage, Lakmali Hemachandra and Sagarika Athauda, while Deputy Minister Dr. Kaushalya Ariyaratne and MPs Thushari Jayasinghe and Anushka Thilakarathne participated online.

The International Monetary Fund (IMF) has revised down Sri Lanka’s economic outlook and approved temporary adjustments to its reform program in response to the economic fallout from the Middle East conflict and Cyclone Ditwah, while maintaining the program’s long-term fiscal and debt sustainability objectives.

The IMF Executive Board last week completed the combined Fifth and Sixth Reviews under Sri Lanka’s Extended Fund Facility (EFF), enabling an immediate disbursement of SDR 508 million, equivalent to approximately $ 695 million, and bringing total IMF financing under the program to about $ 2.4 billion.

The Fund said gains achieved under Sri Lanka’s reform program had enabled the authorities to respond to successive shocks while preserving economic resilience.

However, it noted that the Middle East conflict has significantly worsened the country’s external outlook through higher fuel import costs, weaker tourism receipts, pressure on the balance of payments, and softer external demand.

According to the IMF’s revised baseline projections, Sri Lanka’s economic growth is now expected to slow to 3% in 2026 from the 4% forecast prior to the conflict.

End-year inflation has been revised up to 6.1% from 5%, while projected gross official reserves at end-2026 have been reduced to $ 8.645 billion from the $ 9.506 billion anticipated before the conflict. Tourism earnings are now projected at $ 2.5 billion compared with the previous estimate of $ 3.1 billion, while the current account excluding primary income is forecast at 1.8% of GDP, down from 2.8% previously.

The IMF said the conflict has particular significance for Sri Lanka given the country’s dependence on the Middle East region. The report noted that around half of Sri Lanka’s petroleum imports originate from the region, while the Middle East accounts for about 40% of remittance inflows and serves as a major aviation hub for travel to Sri Lanka.

Reflecting the economic impact of the shocks, the IMF endorsed the Government’s decision to activate the escape clause under the Public Financial Management Act and temporarily ease fiscal policy in 2026. The Fund noted that Sri Lanka recorded a primary surplus of 5.4% of GDP in 2025, significantly exceeding program expectations, and said a lower primary balance target had been adopted for 2026. The program is expected to return to its medium-term fiscal anchor of a 2.3% primary surplus from 2027 onwards.

The Government has also introduced a temporary support package valued at Rs. 91.8 billion comprising fuel subsidies, electricity subsidies, fertiliser assistance, fisheries support, and an Aswesuma cash transfer. The package is capped at Rs. 100 billion, financed through Budget reallocations and scheduled to expire by September 2026. The IMF described the temporary fiscal easing as an appropriate response to cushion vulnerable households and support recovery while preserving debt sustainability.

The review also reflects a slower pace of reserve accumulation than previously envisaged. The IMF said the end-March indicative target on net international reserves was narrowly missed due to a slowdown in foreign exchange purchases following the Middle East conflict, changes in the composition of reserves, and valuation effects.

Despite the weaker outlook, program performance was assessed as broadly strong. The IMF said all end-December 2025 quantitative performance criteria and indicative targets were met except for the criterion relating to new external payment arrears. Fiscal revenue and primary balance targets were exceeded by substantial margins.

The sole waiver approved by the IMF relates to a cybercrime incident that resulted in a missed external debt payment of approximately $ 2.5 million to the Australian Government. The Fund said authorities requested a waiver of non-observance on the basis that the breach was minor and corrective measures had been implemented, including strengthened payment procedures and the rollout of a new debt management information system. IMF staff supported the waiver request.

The IMF also noted that new and modified quantitative targets and structural benchmarks have been introduced through February 2027, reflecting the changed economic environment and the need to accommodate the impact of the external shocks.

While allowing temporary flexibility, the Fund stressed that the program’s core policy framework remains intact. Fiscal consolidation is expected to resume from 2027, reserve accumulation will continue, exchange rate flexibility will be maintained, and energy pricing is expected to remain aligned with cost-recovery principles. The IMF said the final year of the program would focus on consolidating gains achieved since the crisis and strengthening the foundations for sustainable growth.

For investors and policymakers, the review signals that the IMF is willing to accommodate temporary external shocks through revised projections and limited fiscal flexibility, but remains committed to preserving the broader macroeconomic adjustment and debt sustainability framework underpinning Sri Lanka’s recovery.

US President Donald Trump on Friday signed Executive Order ‘Strengthening Customs Enforcement,’ empowering US Customs and Border Protection (CBP) with a comprehensive set of tools to safeguard American consumers, businesses, and revenue while increasing transparency and compliance across international supply chains.

‘CBP stands ready to enforce this Executive Order,’ said CBP Commissioner Rodney Scott. ‘Importing into the US has for too long been treated as a right and not a privilege. CBP will execute the priorities in this Executive Order and, by doing so, we will fortify our trading border just as we have done with our physical border.’

‘This Executive Order helps CBP better detect when bad trade actors try to break the rules,’ said CBP Office of Trade Executive Assistant Commissioner Susan Thomas. ‘These are major advances in protecting our revenue and increasing supply chain transparency-both critical to ensuring fairness for everyone and safeguarding our nation’s economic and national security.’

Among its key provisions, the Executive Order requires importers, whether domestic or foreign, to meet the same standards for transparency and accountability. As directed by the Order, importers are required to provide more detailed information about their ownership, business operations, and supply chain, and must maintain good standing with CBP to continue importing. Customs brokers will also be held to higher standards and be required to conduct greater due diligence of their importers.

‘The Executive Order provides CBP with critical new tools and authorities to combat nefarious actors attempting to exploit our trade and cargo systems,’ said CBP Office of Field Operations Executive Assistant Commissioner Diane Sabatino. ‘Our officers and import specialists are now better equipped to identify, interdict, and penalise those who threaten our economic security and national interests through illicit trade practices.’

In addition, foreign importers are now subject to heightened import restrictions to protect the American public and revenue owed to the US. To further strengthen enforcement, bond rules are also being updated to set new minimums and leverage against risk. This ensures all importers are financially responsible for their activities, supports CBP’s ability to collect penalties for violations, and prevents companies from exploiting outdated requirements.

Importers must also maintain good standing with CBP and risk losing their importing privileges if they fail to comply with US Customs and trade laws.

These changes advance the America First Trade Policy and strengthen Customs enforcement by enhancing supply chain security, creating a level playing field for businesses that follow the rules, and protecting American consumers.

Emirates has promoted two accomplished Emirati female pilots to captains, marking a pivotal step forward in its commitment to empowering Emirati women in aviation.

Hanan Mohammed Jawad and Bakhita Al Mheiri both rose through the Emirates Group’s National Cadet Pilot Program, an initiative that has graduated numerous Emirati pilots, the airline said.

Hanan Mohammed Jawad joined Emirates in 2008 through the cadet pilot program, driven by ambition, passion, and a lifelong dream of taking to the skies. With strong mentorship and continued support from the airline’s fleet management, she steadily progressed through the ranks, building her career from the ground up.

Bakhita Al Mheiri began her journey with Emirates as a cadet pilot in 2011. Inspired by successful Emirati female pilots and driven by her passion for flying, Bakhita continued to achieve one milestone after another, building a strong and successful career with Emirates.

Hanan and Bakhita have both officially received their fourth stripe this year, becoming the first Emirati female captains at Emirates, both operating the Boeing 777 fleet. With many years of experience in their respective careers, they both reflect a determination as strong as ever, and their ambitions continue to reach new heights, it said.

Home Lands Group has appointed globally acclaimed cricket legend Mahela Jayawardene as the company’s Brand Ambassador, ahead of the highly anticipated Grand Launch Weekend of Central Park Boulevard Port City Colombo, the largest real estate launch in Sri Lanka, taking place from 12 to 14 June at Cinnamon Life Colombo.

Widely regarded as one of Sri Lanka’s greatest sporting icons, Jayawardene has built an extraordinary legacy founded on excellence, leadership, integrity, and achievement. A respected former Captain of the Sri Lanka national cricket team, he carved out a distinguished international career spanning nearly two decades, earning global recognition for his contributions to the game both on and off the field.

Throughout his career, Jayawardene established himself as one of the most accomplished batsmen in cricket history, becoming one of the few players to surpass 10,000 runs in both Test and One Day International (ODI) cricket. He led Sri Lanka to the ICC Cricket World Cup final in 2007 and played a pivotal role in some of the nation’s most memorable achievements on the international stage, including the country’s ICC T20 World Cup triumph in 2014. Renowned for his professionalism, strategic thinking, and calm leadership, Jayawardene’s influence has extended far beyond his playing career.

Speaking on this partnership, Jayawardene said: ‘I am honoured to come on board as Brand Ambassador to Sri Lanka’s no. 1, most trusted, and most innovative developer Home Lands Group and to join hands with a brand that strives to work and deliver with the values of trust, innovation, and excellence.’

The partnership between Home Lands and Jayawardene represents a natural alignment of values and vision. Both have built their reputations on trust, consistency, credibility, innovation, and excellence, earning the respect of audiences both locally and internationally.

Just as Jayawardene carried Sri Lankan excellence onto the global sporting stage, Home Lands has become the leading force in showcasing the potential of Sri Lankan real estate to the world.

Together, they embody a shared commitment to raising standards, delivering on promises, and creating a legacy built on integrity, achievement, and long-term success.

Home Lands Group of Companies Chairman Nalin Herath said: ‘Mahela is one of Sri Lanka’s most respected global ambassadors, whose achievements, leadership, and influence have earned recognition well beyond the world of cricket. It is this legacy of excellence, credibility, and international stature that makes him a natural fit for Home Lands, as the company continues to elevate Sri Lankan real estate onto the global stage.’

Sri Lanka’s banking sector recorded strong lending growth and improving asset quality in the year to end-March 2026, although profitability moderated amid higher impairment charges and operating expenses, according to recent data from the Central Bank of Sri Lanka (CBSL).

Total assets increased by 11.3% to Rs. 25.8 trillion at end-March 2026 from Rs. 23.2 trillion a year earlier. Net loans and receivables rose by Rs. 2.81 trillion, or 26.3%, to Rs. 13.5 trillion, significantly outpacing the 9.5% increase in deposits to Rs. 20.5 trillion. Borrowings grew 30.2% to Rs. 1.88 trillion, while equity capital and reserves expanded 14.7% to Rs. 2.41 trillion.

Net interest income increased 9.7% to Rs. 270.3 billion. However, impairment charges for loans and other losses rose 35.5% to Rs. 31.3 billion and operating expenses increased 16.4% to Rs. 131.3 billion. Non-interest income declined marginally by 1.4% to Rs. 68.9 billion.

As a result, Profit Before Tax (PBT) fell 4.1% to Rs. 136.4 billion from Rs. 142.3 billion a year earlier, while Profit After Tax (PAT) declined 4.6% to Rs. 86.4 billion from Rs. 90.6 billion. Return on equity (ROE) eased to 15% from 18.7%, while return on assets (ROA) declined to 2.2% from 2.6%. The net interest margin moderated to 4.4% from 4.6%.

Asset quality indicators improved during the period. The Stage 3 loans-to-total loans ratio, including undrawn amounts and net of Stage 3 impairment, declined to 9.4% from 12.7%, while the ratio excluding undrawn amounts fell to 9.4% from 12.5%. Stage 3 impairment coverage increased to 59.5% from 54.1%, although total impairment coverage declined to 7.2% from 8.5%.

Capital and liquidity indicators moderated from year-earlier levels but remained well above minimum regulatory requirements. The Capital Adequacy Ratio (CAR) stood at 18.3%, compared with 19.4% a year earlier, while the Tier 1 Capital Ratio declined to 14.8% from 16%. The All-Currency Liquidity Coverage Ratio (LCR) eased to 234.7% from 310.6%, while the Rupee LCR declined to 267.9% from 342.4%. The Net Stable Funding Ratio (NSFR) stood at 150.6%. The sector’s Credit-To-Deposit ratio increased to 71.2% from 62.6%, reflecting stronger lending activity as private sector credit demand continued to recover.

Despite lower profitability and somewhat lower capital and liquidity ratios, the banking sector remained well capitalised and liquid, while asset quality indicators improved markedly over the year.

The financial system remained resilient during the first quarter of 2026 despite heightened geopolitical tensions, external sector pressures and growing global uncertainty, according to the Central Bank of Sri Lanka’s (CBSL) latest Financial Sector Performance Report.

The Central Bank said domestic macrofinancial conditions remained broadly supportive during the quarter, supported by strong private sector credit growth and improving financial intermediation, although emerging risks linked to inflation, exchange rate volatility, commodity prices and adverse weather conditions continued to warrant close monitoring.

Macrofinancial conditions

The CBSL noted that total credit extended by licensed banks and finance companies expanded further during the quarter, driven mainly by private sector lending, while exposures to the Government and public corporations moderated marginally.

Financial intermediation improved with the banking sector’s credit-to-deposit ratio exceeding 70% for the first time in three years, reflecting the continued recovery in lending activity.

However, the Central Bank cautioned that the credit-to-GDP gap widened further into positive territory, indicating the potential build-up of systemic risks within the financial sector.

The report said sustained fiscal consolidation, stronger external buffers and vigilant monitoring of emerging macrofinancial risks would remain critical to preserving financial stability amid rising energy prices, commodity market volatility, exchange rate fluctuations and inflationary pressures.

Banking sector performance

Credit granted by the banking sector grew by 24.4% year-on-year (YoY)

at end-March 2026, sharply higher than the 7.9% growth recorded a year earlier.

Asset quality continued to improve, with the Stage 3 loans ratio declining to 9.4% from 12.7%, supported by both credit expansion and a slight reduction in impaired loans. The impairment coverage ratio for Stage 3 loans improved to 59.5% from 54.1%.

The acceleration in lending was reflected in a moderation of liquidity buffers. The rupee liquidity coverage ratio declined to 267.9% from 342.4%, while the all-currency liquidity coverage ratio fell to 234.7% from 310.6%. Nevertheless, both remained well above the minimum regulatory requirement of 100%.

Profitability weakened modestly during the quarter, with profit after tax (PAT)

declining by 7.1% YoY due mainly to higher operating expenses. Return on (ROE)

fell to 14.8% from 18.7%, while return on assets declined to 2.2% from 2.6%.

The banking sector’s total capital adequacy (CAR) moderated to 18.3% from 19.4% a year earlier as risk-weighted assets increased alongside stronger lending growth.

The CBSL also warned that the recent depreciation of the rupee and higher secondary market yields could exert further pressure on capital buffers through asset revaluation effects. In addition, cyber-related incidents and financial scams remain emerging risks requiring greater vigilance.

Finance companies sector performance

The finance companies sector maintained strong growth momentum during the quarter, with total credit expanding by 52.4% YoY compared to 26.9% growth recorded a year earlier.

The expansion was largely driven by vehicle financing and gold-backed lending. Vehicle-backed lending increased by 52.8%, while gold-backed lending recorded a robust 69.2% increase.

Asset quality improved significantly, with the Stage 3 loans ratio declining to 4.4% from 8.6%. However, the impairment coverage ratio eased slightly to 45.1% from 47.4%.

Liquidity remained comfortable, with total liquid assets increasing

by 9.7% YoY and remaining well above regulatory requirements.

Profitability strengthened considerably, with PAT rising by 28.8% during the 2025/26 financial year. ROE increased to 17.2% from 15.2%, although return on (ROA) moderated slightly to 6.2% from 6.6%.

The sector’s total CAR declined to 18.4% from 20.9% due to rapid credit expansion.

The Central Bank noted that future lending growth may moderate due to higher vehicle prices arising from increased import duties and exchange rate depreciation, as well as tighter monetary and macroprudential policies.

Financial market performance

Domestic financial markets experienced increased pressure during the first five months of 2026 amid escalating tensions in the Middle East, growing external sector vulnerabilities and speculative market activity.

The Colombo Stock Exchange recorded mixed performance. The All Share Price Index declined by 1.4%, while the S and P SL20 Index remained broadly unchanged, posting a marginal gain of 0.03% as at end-May.

Foreign investors continued to exit the market, with net foreign outflows amounting to $ 103.4 million during the period, adding to cumulative divestments recorded over the previous two years.

The Government securities market also came under pressure, with yields trending upwards from March and rising further following the 100-basis-point policy rate increase announced by the CBSL in late May.

Secondary market activity moderated somewhat, while foreign participation remained volatile due to evolving global uncertainties.

The domestic foreign exchange market experienced continued volatility amid external sector pressures, while surplus liquidity persisted in the money market, requiring the Central Bank to absorb excess funds through open market operations.

Recent macroprudential measures

In response to rapid growth in collateral-based lending and heightened asset price volatility, the CBSL introduced several macroprudential measures to strengthen financial stability.

With effect from 25 May 2026, a maximum loan-to-value (LTV) ratio of 70% was imposed on credit facilities secured by gold.

The Central Bank also tightened existing maximum LTV ratios applicable to vehicle financing facilities by 10 percentage points.

According to the CBSL, the measures were introduced in response to significant expansion in collateral-backed lending, exchange rate volatility and geopolitical uncertainties that could amplify financial system risks.

The report concluded that while Sri Lanka’s financial sector remained resilient during the first quarter, continued vigilance would be necessary as external shocks, inflationary pressures, commodity price volatility and exchange rate movements continue to pose challenges to macrofinancial stability.

In a significant move set to accelerate digital inclusion and consumer accessibility in Sri Lanka, Singhagiri (Pvt) Ltd. has entered a strategic partnership with Dialog Finance PLC to extend the reach of Lesi Pay smartphone financing across Singhagiri’s extensive islandwide retail network. This partnership brings together one of Sri Lanka’s most established consumer electronics retailers and the country’s leading fintech innovator, enabling customers to access affordable smartphone financing through a fully digital and streamlined process.

By integrating Lesi Pay into Singhagiri outlets nationwide, the collaboration aims to make smartphone ownership more attainable for a wider segment of Sri Lankan consumers at a time when digital connectivity continues to play an increasingly essential role in everyday life.

Under the partnership, customers can initiate the financing process digitally via the Genie app and complete their purchase conveniently at a nearby Singhagiri outlet, creating a connected omnichannel experience that combines the speed and simplicity of digital technology with the assurance of trusted in-store service.

Designed to remove many of the traditional barriers associated with consumer financing, Lesi Pay offers flexible repayment plans of up to 18 months without requiring a credit card or guarantor. The entirely paperless application process requires minimal documentation, allowing customers to check their eligibility quickly and securely while benefiting from a faster approval journey.

The collaboration also represents a strategic expansion of Dialog Finance’s Lesi Pay ecosystem beyond its existing retail touchpoints, strengthening nationwide accessibility through Singhagiri’s well-established network of over 140 outlets across the country. The initiative further reflects the growing convergence between retail and fintech sectors in delivering more inclusive and digitally enabled financial solutions to consumers.

As smartphone adoption continues to underpin access to digital services, education, financial inclusion, and economic participation, the partnership underscores a shared commitment by both organizations to empower Sri Lankans through accessible technology and innovative financial solutions.

Lesi Pay is available through Dialog Finance PLC’s authorized partner network, including Singhagiri outlets and Dialog Customer Experience Centers islandwide. Customers can begin the process by downloading the Genie app and digitally verifying their eligibility.

About Singhagiri

Founded in 1977 by the late Sugathadasa Marasinghe, Singhagiri has grown to become one of Sri Lanka’s most recognized names in consumer electronics retail. The company played a pioneering role in introducing Samsung products to Sri Lanka in 1983 and continues to serve as an authorized Samsung Electronics partner, supported by a robust nationwide footprint spanning more than 140 retail outlets.

About Dialog Finance Lesi Pay

Dialog Finance PLC continues to drive innovation in Sri Lanka’s digital financial services landscape through customer-centric solutions designed around accessibility, convenience, and inclusion. Lesi Pay embodies this vision by offering consumers a practical and affordable pathway to smartphone ownership through a seamless digital financing experience supported by an expanding nationwide partner network.

As stakeholders of the Sri Lankan economy, all chambers of commerce, trade associations, industrial sectors, and business leaders should come together at this important stage of economic recovery and engage constructively with the Government, Cabinet of Ministers, and policymakers.

Sri Lanka has only recently emerged from one of the most difficult foreign exchange and economic crises in its history. Therefore, it is essential that we adopt responsible economic and import management policies until the country achieves a stable and sustainable recovery.

At present, serious attention should be given to controlling the large-scale importation of non-essential commercial consumer goods which place unnecessary pressure on the country’s valuable foreign exchange reserves. Priority should instead be given to the importation of:

Food and essential consumer items

Fuel and energy-related products

Medicines and healthcare products

Industrial raw materials and machinery required for production and exports

Educational and agricultural necessities

Further consideration may also be given to limiting luxury and non-essential commercial imports temporarily, while allowing reasonable quantities of personal-use consumer goods for the public.

In addition, policymakers may review the current foreign currency outflow mechanisms, including large passenger foreign exchange allowances, until Sri Lanka reaches stronger reserve stability and long-term economic confidence.

As responsible stakeholders, chambers and trade bodies should collectively present practical recommendations through discussions, press conferences, and policy forums to support national economic protection, reserve management, local industries, and employment generation.

At this stage, national economic discipline, controlled spending of foreign exchange, and productive investment are essential to avoid another period of financial instability or recession.

The objective should not be to restrict trade unnecessarily, but to ensure that Sri Lanka’s foreign exchange resources are utilised carefully, productively, and sustainably until the country achieves full economic stability.

(The author is President of Customs House Association (CHA) Traders Association)