South Asia

Central Bank Governor, Nandalal Weerasinghe, on Thursday emphasised the importance

of relieving burden on the banking system caused by the already excessive 50 per cent taxes with the ongoing economic crisis.

The Governor was highlighting the importance of ensuring the IMF requirement with regard to internal and external debt restructuring.

Sri Lanka announced five-days banking holidays starting from Thursday until the Parliament which is to be summoned during the weekend approve the DDR.

Weerasinghe said that recently there were rumours about bank collapses, and concerns were raised regarding the safety of deposits.

“Withdrawing deposits from banks would lead to an economic collapse,” he warned.

“Protecting the banking system and ensuring the safety of depositors' funds are crucial

responsibilities. The banking system plays a vital role in the economy, as evidenced by the 57 million bank accounts holding deposits from a population of around 20 million. Any harm to these funds would have a severe impact on the banking system,” the Central Bank Governor said, adding, “as the Central Bank, our primary objective is to safeguard the banking system and the currency."

President Ranil Wickremesinghe had earlier assured that the restructuring would not lead to a collapse of the banking system.

The Cabinet approved the Central Bank’s proposal for the DDR and it is to be submitted to the parliament for approval over the weekend.

The Governor highlighted the severe repercussions that would result from a collapse in the country's banking sector.

“To prevent such a scenario, June 30 (Friday) was declared a bank holiday until the Parliament approves the restructuring of local debt,” the Central Bank Governor added.

In addition, Weerasinghe assured the people that the existing Employee Provident Fund

(EPF) which is over Sri Lankan Rs 3 trillion by the end of 2021, would remain untouched.

Additionally, he guaranteed a minimum interest rate of 9 per cent for the EPF.

Going through the worst-ever economic crisis since the independence, Sri Lanka has struck a deal with the IMF to secure nearly $3 billion and in turn had agreed to restructure both foreign debts around $41 billion and domestic debts of $42 billion as of March 2023.

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The BSF said the exchange of sweets was done all along the BoPs in Samba, Kathua, RS Pura, and Akhnoor border.

"BSF Jammu offered sweets to Rangers and Rangers also reciprocated the BSF gesture by offering sweets to them," the BSF said.

"The BSF has always been on the forefront in creating a peaceful and congenial atmosphere on border while dominating the border effectively. Such gestures help build a peaceful atmosphere and cordial relationships on border between both border guarding forces."

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The new trailer for 'Retribution' promises an action and suspense driven spectacle as Liam Neeson’s whole life is turned around by a mysterious caller. The actor was earlier seen in the 2022 film 'Marlowe', and the 'Star Wars' series 'Obi Wan Kenobi' and 'Tales of the Jedi'.

Driving down the road with his kids, Matt Turner (Neeson) receives a mysterious call from a man who tells him that there is a bomb in his car and gives him instructions to drive around or else either he will be blown up, or those he cares for will. Refusal to follow the orders shows the caller bombing Matt’s associates, in a warped and sadistic mind game.

Directed by action director Nimrod Antal, 'Retribution' is a remake of the Spanish film 'El desconocido', and is produced by Andrew Rona, Alex Heineman, Jaume Collet-Serra and Juan Sola. Released by Lionsgate, 'Retribution' shall hit theaters on August 25, 2023.

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The two sides also decided to extend cooperation in the fields of health, tourism, agriculture, space as well as science and technology.

In a joint statement issued by both nations on the conclusion of the 5th India-Philippines Joint Commission on Bilateral Cooperation (JCBC) meeting, both external affairs minister S Jaishankar and Philippines' secretary for foreign affairs Enrique Manalo expressed keen interest to continue to work together in the defence sector.

Cooperation would take place through regular or upgraded official level interaction among defence agencies, opening of the resident Defense Attache office in Manila, consideration of India’s offer for concessional line of credit to meet Philippines’ defense requirements, acquisition of naval assets, and expansion of training and joint exercises on maritime security and disaster response, among others, the joint statement said.

Under maritime cooperation, while acknowledging the growing importance of the maritime sector for both countries, the two ministers welcomed the bilateral Maritime Dialogue and the increased cooperation on hydrography.

They also emphasised the utility of maritime domain awareness, and in this context called for early operationalisation of the Standard Operating Procedure (SOP) for the White Shipping Agreement between the Indian Navy and the Philippines Coast Guard.

They looked forward to the signing of the MoU on enhanced maritime cooperation between the Indian Coast Guard and Philippines Coast Guard.

For law enforcement cooperation, both Jaishankar and Manalo encouraged early negotiations for a bilateral Mutual Legal Assistance Treaty on Criminal Matters and a Treaty on Transfer of Sentenced Persons.

It was agreed that the first round of talks would be held in the Philippines in August 2023.

"Recognising terrorism and transnational crimes as common security threats, they directed that the 2nd Joint Working Group on counter-terrorism meet in the Philippines in 2023 and discuss forging a Memorandum of Understanding on Cooperation in Preventing and Combating Terrorism and Transnational Crime," the joint statement said.

Towards cooperation in trade and investment sector, both the leaders expressed satisfaction at the growing pace of bilateral trade, which had for the first time crossed the level of $3 billion in 2022-23, and agreed to commence negotiations on a bilateral Preferential Trade Agreement.

Manalo is in India on the invitation of Jaishankar to participate in the JCBC meeting.

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The report, which is a half-yearly report card of financial institutions' health, while presenting an overview of the financial sector, noted: "Sustained growth momentum, moderating inflation and anchoring of inflation expectations, a narrowing current account deficit (CAD) and rising foreign exchange reserves, ongoing fiscal consolidation and a robust financial system are setting the economy on a path of sustained growth."

"Healthy balance sheets of banks and corporates are engendering a new credit and investment cycle. Strong revenue growth, higher profits and lower leverage are helping corporates to improve their bottom lines," it added.

Banks and non-bank financial intermediaries are posting strong earnings and robust credit growth with strengthening buffers, the report said.

These improvements are brightening the prospects of the Indian economy, fortified by the rising pace, the RBI document added.

However it cautioned at the same time, that the stability of the global financial system is tested by high inflation, tight financial conditions and banking system fragilities.

Simultaneously, geopolitical tensions and economic fragmentation are threatening macroeconomic stability. Bouts of volatility surge through financial markets amidst rapid shifts in investor sentiments.

Emerging market economies (EMEs) could face significant spillover risks and asymmetric effects of macrofinancial instability, it pointed out.

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The law, coming into force from July 1, comes as China’s authoritarian government pushes back against what it sees as American efforts to suppress its development, following US export controls on some high-tech goods and efforts to reduce reliance on Chinese suppliers in the sensitive sectors, CNN reported.

The two countries have entered a period of deep suspicion and tension that marks a low point in their relations, even as US Secretary of State Antony Blinken visited Beijing earlier this month in an effort to stabilise ties.

The new law stresses its right “to take corresponding countermeasures and restrictive measures” against acts that violate international law and norms and that “endanger China’s sovereignty, security and development interests", CNN reported.

It is China’s first foreign policy legislation of this scope and lands as Xi Jinping -- the country’s most powerful leader in decades -- has seen his drive to amplify China’s power and influence on the world stage clash with concern from the US and other nations over Beijing’s ambitions and increasingly assertive foreign policy.

The legislation was approved by a top decision-making body within China’s rubber-stamp parliament on Wednesday. Its chairman Zhao Leji hailed the law as having “great significance” for safeguarding the country and supporting “national rejuvenation” -- a nod to Xi’s vision for a powerful, modern China, CNN reported.

The release comes “amid new challenges in foreign relations, especially when China has been facing frequent external interference in its internal affairs under the Western hegemony with unilateral sanctions and long-arm jurisdiction", China’s state-run tabloid Global Times said.

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He also said the subsea cable system MIST with a capacity of nearly 200 TBPS of data had landed in Chennai.

Currently, the NTT group has 16 data centres operational in four cities -- Chennai, Bengaluru, Mumbai and Noida near Delhi. The group is building 11 more data centres in the above four cities and in Kolkata.

"We are getting into tier two cities like Pune, Ahmedabad, Jaipur, Lucknow, Bhopal and others. We have identified land parcels," Sharad Sanghi, Chairman, NTT Global Data Centers & Cloud Infrastructure India Pvt Ltd told media launching a new data centre here.

Sanghi said a typical data centre would involve an investment of about $100-150 million and NTT will be investing about $300 million in its data centre in Chennai -- one completed and one under construction.

He said NTT had announced an investment of $2 billion four years back and the outlay for the Chennai centre is part of that. The group is investing about $500 million a year. According to him, India ranks number three in terms of business for NTT globally and will soon go higher up as the potential is large.

Globally the $108 billion Japanese group is present in 20 countries with 1,900 MW IT load and over 1,000 MW additional planned. Sanghi said the group commands 22 per cent data centre market share in India.

The capacity utilisation of the data centres is at about 70-80 per cent. Queried about the group's renewable energy plans he said the focus is on solar and solar-wind hybrid plants. The group also will buy power from renewable sources.

Shekhar Sharma, CEO & Managing Director added that the IT load of the existing data centres is about 204 MW and by March 2024 it will go up to 349.2 MW owing to expansions. He said if one takes into account the current and future planned, the additional IT load will be 526.4 MW taking the total for NTT in India to 821.8 MW.

The officials said the MIST (Malaysia, India, Singapore and Thailand) subsea cable-the first cable system for the NTT group-will provide direct connectivity to and from India. The subsea cable spans 8,100 km and will connect the above four countries. It is also the first cable landing of a 12-fiber pair capacity, capable of carrying more than 200 TBPS of data, the NTT said.

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The island nation is facing its worst economic crisis since it won independence from the British in 1948, BBC reported.

There are fears that the government's restructuring plan could lead to volatility in financial markets, the report said.

Debt restructuring can involve the extension of the period over which a loan is repaid.

"The government's action to call an extended public holiday means it obviously saw the risk of bank runs," Alex Holmes, a senior economist at Oxford Economics, told the BBC.

Local media also quoted analysts as saying that the holiday was announced to provide a suitable buffer for any potential market reactions to significant financial announcements, BBC reported.

Earlier this week, Sri Lanka President Ranil Wickremesinghe reassured the public that that the restructuring would "not lead to a collapse of the banking system".

On Wednesday, Wickremesinghe's office had said his cabinet has approved a restructuring proposal by the country's central bank. The plan will be submitted to parliament for approval over the weekend.

"(The) government expects the entire process to conclude while the markets are closed during these five days," Sri Lanka central bank chief Nandalal Weerasinghe said.

Weerasinghe added that "local depositors are assured of the safety of their deposits and interests will not be affected".

The move to restructure domestic debt comes as the country is struggling to come out of its worst economic crisis.

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In the fiscal year 2022, the ADB said trade and industry contributed 14.1 per cent to Nepal's gross domestic product (GDP), reports Xinhua news agency.

The Manila-based lender said the Nepal government is pushing to increase the contribution of trade to GDP by improving the trade and export promotion environment and strengthening the supply chain of primary products.

Essential to this is the improvement of customs and logistics systems and services such as efficient transport, transit arrangements, and border procedures.

According to the ADB, the program will help implement the current Customs Reform and Modernization Plan by improving customs processes through introducing digital technologies, such as electronic payments of customs duties and fees and electronic submission of export documents.

It will establish an online customs valuation database and reduce export documentation to facilitate customs clearance.

The program will also expand Nepal's trade facilitation efforts to the logistics sector to promote more efficient movement of goods among producers, distributors, sellers, and buyers.

Activities supported include the integration of logistics infrastructure to facilitate multimodal transport and last-mile connectivity and the establishment of a one-stop logistics information portal.

"The development of the trade and industry sector will boost competitiveness and help steer the country toward sustainable economic growth," said ADB South Asia Department's Director of Regional Cooperation and Operations Coordination Thiam Hee Ng, adding that improved trade facilitation can boost exports and help address Nepal's balance of payment.

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The World Bank Group's Board of Executive Directors discussed the new Country Partnership Framework (CPF) for Sri Lanka, which aims to help restore economic and financial sector stability and build a strong foundation for a green, resilient, and inclusive recovery, reports Xinhua news agency quoting an official statement issued by the global lender.

The CPF, which covers the years from 2024 to 2027, lays out a two-phased approach that starts with a focus on urgent macro-fiscal and structural reforms and supports protecting the human capital and the most vulnerable population.

The statement said it comes at a time when the country is navigating its worst-ever economic crisis that has had devastating impacts on people's lives and demands deep reforms to stabilise the economy and protect the poor and vulnerable.

Sri Lanka's poverty rate is estimated to have doubled from 13.1 to 25 per cent between 2021 and 2022, an addition of 2.5 million poor people, and is projected to increase by another 2.4 percentage points in 2023, according to the statement.

"The extent of the crisis in Sri Lanka is unprecedented, but offers a historic opportunity for deep reforms to reset the country's economic storyline," said Faris H. Hadad-Zervos, World Bank country director for Sri Lanka.

--IANS

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