Business Times

LTTE wipe-out curbs ‘Hawala’ trade

Sharp drop in remittances through illegal channels

Gamini Wickremasinghe

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.

Top to the page  |  E-mail  |  views[1]
SocialTwist Tell-a-Friend
Other Business Times Articles
LTTE wipe-out curbs ‘Hawala’ trade
Climate change, restive workforce dogs Dankotuwa Porcelain
Confifi’s minority shareholders cry foul
Cabraal re-appointed Central Bank governor
Private managers essential to run Shell under state control
Comment - Govt: Stay out of business
Feature - Is Sri Lanka ready for future Golden Key scandals?
Feature - Annals of gullibility: Next Golden Key is around the corner
John Keells Group wins 9 Presidential Awards for Travel and Tourism
Infotel to kick off at the end of September
Import duty cuts pull down computer prices
LB Finance shows Rs 500 mln profit, unscathed from run on deposits
Malnutrition could affect future human resources
First for First Guardian Equities
Indian mobile phone maker Micromax enters the Sri Lankan market
Letter - Drilling for oil in the Gulf of Mannar
Letter - CEPA : A medical perspective
Factories closing? Think again
Seven insights for Corporate Managers
Hirdaramani Group diversifies into IT, looks at other investments
Offers to Tokyo Cement shareholders
Desktop PCs have come down to Rs 30,000 from Rs 90,000
Sri Lanka lags behind in education – Maldives businessman
Derivatives – the good , bad and the ugly
New website promotes Alien book and tourism in Sri Lanka
Asian Paints trains & accredits local painters
Heritance hotel team at Singaporean culinary challenge
Coke makes donation to Habitat for Humanity
UNIDO to recommend Brandix Seeduwa as green example
Top global accountant at CMA Summit
Sri Lanka to sell power to India
Worry over possible exploitation of Northeast workers
U.S. apparel retailers turn their gaze beyond China
CEAT records five-fold profit growth in Sri Lanka
Seylan Bank to implement Manpower Plan
Long wait for 100 GK depositors to get money back
Sunshine says had 'solid' performance in 2009-10
From rags to riches, Nawaloka Mudalali enters 90th year
BAM Holdings – TESCO join hands in Community Service
Sri Lankan management consultants for Maldives Electricity Board
Mobile app development portal launched
Dambatenne estate enhances living standards of estate community


Reproduction of articles permitted when used without any alterations to contents and a link to the source page.
© Copyright 2010 | Wijeya Newspapers Ltd.Colombo. Sri Lanka. All Rights Reserved.| Site best viewed in IE ver 6.0 @ 1024 x 768 resolution