Corruption fighter recommends reforms to release CB from EPF responsibilities Wednesday July 2, 2025 5:00 pm Wednesday July 2, 2025 5:00 pm ECONOMYNEXT –Transparency International Sri Lanka (TISL), the local body of Transparency International (TI), which has been fighting against corruption in the island nation has recommended reforms in the structure of Central Bank to release it from to managing the Employees’ Provident Fund (EPF) and involvement in taxation schemes. In its latest report on ‘The Civil Society Parallel Report on Sri Lanka’s Implementation of the United Nations Convention Against Corruption (UNCAC)’ it said the Central Bank has conflicts of interest in the EPF and taxation schemes. “The governance structure of the Central Bank of Sri Lanka reveals significant conflicts of interest that compromise its autonomy and effectiveness,” the TISL said in its report. “Under the previous legal framework, the CBSL was directly responsible for managing both the Employee Provident Fund (EPF) and the Debt Management Office, a dual mandate that blurs the boundaries between monetary and fiscal policy functions. The TISL said such arrangement has attracted public criticism, particularly regarding the handling of government securities and domestic borrowings, as it creates an inherent conflict when the same institution oversees regulatory functions and operational fiscal activities. “Moreover, the Monetary Board’s involvement in both the EPF’s governance—making key investment decisions and reviewing financial statements—and Central Bank supervision raises concerns that its focus may be diverted from core monetary responsibilities, thereby undermining public confidence in its impartiality,” it said. “Although the enactment of the new Central Bank of Sri Lanka Act is a critical step toward enhancing the bank’s institutional, personal, and financial autonomy by reforming appointment processes, the transition remains incomplete without a fully delineated alternative framework to separate monetary policy from fiscal management.” These structural issues continue to erode the credibility of the CBSL, ultimately impeding efforts to promote transparency and accountability within a crucial sector of Sri Lanka’s public service, the TISL said. The TISL also said the Central Bank took nearly a year to provide information on the use of the EPF superannuation fund for domestic debt restructuring, following multiple hearings with the RTI Commission, after initially providing incomplete information. The TISL’s report did not elaborate on the taxation schemes the central bank was involved with. (Colombo/July 2/2025) Continue Reading