People’s Bank Chief Executive Officer and General Manager Ranjith Kodithuwakku says that the People’s Bank will have to pay US $ 9 million as per the letter of credit opened to import the stock of Chinese organic fertilizer which was rejected due to the presence of microorganisms. This situation could be a challenge for People’s Bank as well, he said.
In an interview with Chamuditha Samarawickrema’s Truth with Chamuditha YouTube channel, he further stated that the reason for People’s Bank’s blacklisting in China was due to a court injunction, which is an issue related to international transactions, but it is certainly safe for other transactions.
He pointed out that the People’s Bank had taken steps to open this letter of credit in accordance with the terms and conditions given by the Commercial Fertilizer Company, the importer of the fertilizer stock, and that this may have been due to some shortcomings or ignorance regarding the conditions imposed by the importer. However, the General Manager said that the bank was obliged to pay the amount due to the Chinese company on the letter of credit that had been opened and that the court had only acted in accordance with the enjoining order issued by the court and if the court censorship was lifted, we would be able to repay the amount.
“As a responsible bank, we must respect the judicial process in the country. We have also informed the Chinese Embassy about this. We pointed out that People’s Bank is not responsible for the misrepresentation of banks. It is purely a judicial process. The parties to this are the Commercial Fertilizer Company which imported this stock of fertilizer. At present, everyone, including the Governor of the Central Bank, is working hard to rectify the situation.
Normally any bank would open a letter of credit without looking at the goods it imports. On documents. Conditions related to goods should be prepared in agreement between the importer and the exporter. The bank is not responsible for that. There may be some shortcomings in the relevant conditions. That may be due to ignorance. However, if the court concludes that this must be paid on the relevant terms or lift the enjoining order, we will have to pay $ 9 million. ”
However, the General Manager stressed that many banks face such experiences in international transactions and that the judicial process will not affect the bank’s ratings and will not affect the stability of People’s Bank.
