The end of Sri Lanka’s bloody conflict not only brought peace to the country but has almost wiped out the ‘Hawala’ or illegal banking channel that Tamil rebels used extensively as a means of raising money for their cause, a top banker said this week.
According to the Bank of Ceylon (BoC), remittances from the Tamil Diaspora in the UK to their relatives in Sri Lanka through the BoC has risen sharply to a monthly average of three million sterling pounds now from 50,000 pounds earlier.
“We want to raise it to six million pound per month,” said Bank Chairman Gamini Wickremasinghe, adding that the increased remittances were earlier sent through the illegal banking channel widely known as ‘Hawala’.
Invest with assurances against arrest
Plane-loads of expat Tamils with guarantees of safe passage
An innovative scheme where expatriate Tamils are accompanied to Sri Lanka by Swiss officials in plane-loads and guaranteed safe passage by both the Swiss and Sri Lankan governments, in return for investing in the country, is being proposed by Bank of Ceyln Chairman Gamini Wickremasinghe.
Meeting officials from the state-run Swiss Development Cooperation (SDC) in Colombo, Mr Wickremasinghe made this suggestion, pointing out that rather than the SDC lending money to develop the Northeast, Tamil expatriates could just do that.
“Sometimes there are worries that they (expatriates) would be arrested. So why not the SDC sponsor 10 to 15 plane-loads of Tamils, particularly those who haven’t visited the country, bring them here, and urge them to invest? The Swiss and Sri Lankan governments will guarantee their safe passage into and out of the country,” he told the Business Times. “Then when these expatriates start pouring in their money (which they are yet to do) the need for international agencies to provide funds would be reduced.”
He said remittances are coming in but not investments. “We need to bring down the Tamil Diaspora as tourists after convincing them that they are safe here,” he said. Asked for SDC’s response to the proposal, he said: “They seem to be interested.”
“There were corner shops in UK which advertises current rates. You could walk into one of these shops and send money home (Sri Lanka) through just an SMS. You are given a code and the recipient in northern Sri Lanka is given the same code. The UK channel will inform a local contact to hand over the money to the recipient in local currency,” he said. The modus operandi is that no money is actually transferred to Sri Lanka. The money paid in Sri Lanka came from the enormous sums raised by the LTTE through taxes and other dues residents were forced to pay.
Mr Wickremasinghe said the money received in the UK was kept by the group and used for acquiring military hardware and other needs.
He said the ‘Hawala’ trade in other countries too is breaking down with Sri Lankans realising the futility of sending money through the illegal channels. Recently a Sri Lankan ‘hawala’ trader in Italy disappeared with the money.
Meanwhile this week, the BoC drew huge interest for its debentures offered through the Colombo stockmarket with the Rs 3 billion being oversubscribed and reached Rs 4.2 billion by around Tuesday. The bank says it will close the offer, once it reaches Rs 5 billion.
In terms of remittances from across the world, Mr Wickremasinghe said they expect 10-20 % growth in 2010 from $1.6 billion raised by the BoC last year.
On the Northeast development phase, the BoC is promoting development and going far beyond what a bank is doing, he said. “There is interest from people in the North who want loans to build a renovations, a roof, purchase a cow, etc but still big business in Jaffna is not investing,” he said.