China slaps ban on People’s Bank of Sri Lanka over dispute

China has blacklisted the People’s Bank over a major dispute with Sri Lanka and has also advised Chinese companies not to do business with the bank.

The ban follows a dispute over contaminated fertilizer which Sri Lanka refused to accept from a Chinese company.

The Sri Lankan Government has refused to pay for the fertilizer until a fresh stock is shipped to the country.

The Economic and Commercial Office of the Embassy of the People’s Republic of China in Sri Lanka said it has backlisted the People’s Bank of Sri Lanka for defaulting on payments according to the Letter of Credit (L/C) and the contacts between two parties.

China accused the People’s Bank of Sri Lanka of causing huge losses to Chinese enterprises in international trade with Sri Lanka.

“The Office solemnly reminds all Chinese enterprises to strengthen risk control and avoid accepting L/C issued by People’s Bank of Sri Lanka in international trade with Sri Lanka,” the Chinese Embassy said.

The decision has also been submitted to the Ministry of Commerce of China.

Meanwhile, People’s Bank said that it has come to know that the Economic and Commercial Counselor of Embassy of People’s Republic of China in Sri Lanka has blacklisted the People’s Bank for not effecting the payments for in lieu of a Letter of Credit issued by the bank.

People’s Bank said it has already communicated to the relevant authorities at the Chinese Embassy that the bank is bound by an enjoining order issued by the Western Province Commercial High Courts of Sri Lanka with regard to the trade transaction in question, which precludes the bank from processing of the payment.

The bank said the temporary delay in processing the said payment pertaining to the LC is solely due to the bank’s obligation to be bound by the legal directions of the country as a responsible corporate citizen.

People’s Bank said that once the legal barriers in effect are removed, the LC payment will be effected promptly as per the usual trade practices. (Colombo Gazette)

8 COMMENTS

  1. I am loving it, bring it on babe ;—)))

    Utter fools think that they are wiser than Chinese by showing their head to the dragon, tail to the Americans, and feets to Indians ;—)))))))

  2. Now, Now, be good boys and girls you Sri Lankan paddy cultivators and do what your told. Just ask: Massa, how high do you want me to jump or which butt cheek do you want kissed ?

    When China is finished with Sri Lanka, the Goat will know what it feels like to be bent over a chair and have a bottle brush wrapped with barbwire rammed up his rectum. This is what happens when servants forget their positions.

  3. Bad move by China this will only strengthen Sri Lanka US, Europe, India & Russia ties leaving China behind. About time the Chinese learn a hard lesson…

    • Sri Lankan fools who fought Asia’s longest brutal civil war can not teach a lesson to the dragon. If they try, they will end up with a lesson.

  4. Sri Lanka is facing a Foreign Exchange crisis, for the last several months. It is simply shortage of Dollars, to pay for our daily needs, not to mention the loans and other installments that are maturing. You feel sorry for the Small and Medium Enterprises (SME) who beg their bankers to transfer money to foreign suppliers and services who have already supplied the goods. US.$ is officially valued at 203/- by Central Bank but the going rate is close to Rs.250/- per $. Those who imported goods have to incur around Rs.45/- per $. SMEs are going bankrupt, as they cannot absorb additional Rupee payment, for no fault of theirs. But the fancy riders on foreign jaunts are having a gala time. This is agony we the SMEs are facing silently.

    • Unless something drastic happens i.e another bailout loan in the billions, it is the poor who will suffer (as always) terribly in the coming months. Worst case scenario, the bread queues of the Sirimavo Bandaranaike era will be viewed by those who remember as a pleasurable activity, compared to what the people will have to endure shortly.

      And don’t get me going about the stock market. Obviously, there are people in Sri Lanka with more dollars than sense.

LEAVE A REPLY

Please enter your comment!
Please enter your name here