24-year-old collective agreement had to be honoured and precedents followed: CBSL Governor

Pay hike controversy:

Public concerns won’t go unheeded

‘My pay hike is zero’

Governor’s salary lower than those of many others at CBSL

About 100 central bankers have left for overseas jobs since 2022

Newly-passed CBSL Act had nothing to do with triennial pay revision

by Saman Indrajith

The CBSL (Central Bank of Sri Lanka) pay hike controversy apparently refuses to go away. Hardly a day passes without it being taken up in Parliament or elsewhere. The person in the crosshairs of the critics of the CBSL in general and the pay revision in particular is CBSL Governor Dr. Nandalal Weerasinghe.

Has the CBSL departed from the established procedures, processes and practices in effecting the latest pay increases, which reportedly range from 29% to 70%? Do the Central Bankers deserve the salaries they are drawing? Is it fair for the CBSL minor staffers to be given higher salaries than some senior public officials? Has the CBSL Governor benefited from the controversial pay revision, and is he the highest paid Central Banker? How does he feel when some of his critics bay for his blood, in a manner of speaking?

Despite his hectic workload aggravated by numerous meetings on the IMF bailout programme and other economic recovery measures, Dr. Weerasinghe took time off his busy schedule, on Tuesday, to field the aforesaid questions and some more, in a brief interview with The Island.

Excerpts:

Q: How big is the pay hike you have got as the CBSL Governor from the recent salary revision?

A: My pay hike is zero. I have not received a pay hike from the recent salary revision, which only applies to CBSL employees up to the Deputy Governor level. My salary, as the Governor, is lower than those of many CBSL staff including some officials in lower grades. I have no complaints at all about my salary as I hold this position only due to my desire to help the economy recover from its worst crisis by using my experience and knowledge as a career central banker.

Q: But you are entitled to an attractive pension as CBSL Governor. aren’t you?

A. Although the previous CBSL administration made former Governors eligible for a pension irrespective of the length of their tenure, some of them have refused to claim their entitlement. I have also declared that I will not claim any pension benefits from CBSL for my tenure as Governor CBSL.

Q: However, you never had it so good, as your critics say. You now have an official house, official vehicles and other perks, don’t you?

A: I would not say I have never had it so good. Yes, I am entitled to an official residence, vehicle and some other perks like many other public servants. However, once such perks are added as non-cash benefits for taxation purposes, my take-home salary is significantly lower than my gross salary as caps imposed on non-cash benefits that are usually applied to the salaries of public servants are not applicable to the Governor’s salary.

Q: If you think your position as CBSL Governor is not financially rewarding, why did you return from retirement?

A: After my retirement, I moved to Australia with the intention of spending more time with my family as I could not spend quality time with them during the three decades of my career at CBSL. When I was asked whether I could come back and help the country at its darkest hour, I felt a moral obligation to accept the position, despite knowing that it would be detrimental to my family and financial position, when compared to my earning potential as an independent professional. I believe that any loyal countryman would have made the same decision at that time, given the severity of the situation.

Q: It is being argued in some quarters that the CBSL has been able to grant its employees pay hikes arbitrarily because of the newly-passed CBSL Act, which is believed to have given the CBSL unbridled independence. Isn’t it true?

A: The new CBSL Act has nothing to do with the recent salary revision. Since the establishment of CBSL under the provisions of previous law (Monetary Law Act of 1950) salary revisions have been done by the Board of CBSL. Since 1991, such revisions have been done once every three years. Collective agreements have been used to formalize such revisions since 2000, similar to many other public corporations and private sector entities.

Q: Who decided on the salary revision at issue?

A: In the process of collective agreements, salary revisions are decided based on several rounds of intense negotiations between all trade unions and management with the intention to reach a consensus among all parties. Some trade unions are directly affiliated to the existing major political parties while others are independent, representing only the interests of CBSL employees.

Q: If so, why are you drawing all the flak? And, why don’t you tell the public that you alone cannot be held responsible for that?

A: I believe this news has affected different groups of people in different ways. Some people feel very strongly about it. In such circumstances, it is only natural that I have drawn their ire as the head of the institution and perhaps the most public facing entity of CBSL. My goal is to understand the genuine concerns raised by the dissatisfied groups and to restore trust in the CBSL, and therefore I do not think it is prudent for me to distance myself from the issue and deflect.

Q: If you had not returned to accept the post of CBSL Governor after retirement, and had chosen to work for an international organization after the mandatory cooling-off period, would you have earned more than the salary of the CBSL Governor? It is being claimed via social media that you would have had to settle for an ordinary job in Australia if you had not been called from retirement to head the CBSL. What have you got to say to this?

A: I didn’t have any intention to engage in any full-time job after my retirement from CBSL. At the same time, I didn’t want to waste my knowledge and experience which I gained over three decades. I enjoyed my retirement life by conducting my own research and assisting some multilateral organizations and international firms whenever they sought my expertise on a part-time basis while enjoying time with my family and finding more time to travel. In fact, my retirement life was much more financially rewarding than my career at CBSL even as a Deputy Governor.

Q: Don’t you think the blame for the current economic crisis should be apportioned to the CBSL as well? Isn’t it true that the CBSL failed to warn the government against an impending foreign currency reserves crisis?

A: It is clearly evident in the recent Supreme Court case on the economic crisis that the CBSL officials had warned the then Governors, the Monetary Board and the Ministry of Finance about the impending economic crisis but such warnings were ignored. CBSL officials cannot make public statements or report to the Parliament on their own without permission from the Governor or the Board, under confidentiality clauses in CBSL laws. Such provisions are necessary in CBSL laws to prevent highly market sensitive and confidential information being leaked. Therefore, the CBSL professional staff cannot be blamed for the current economic crisis.

Q: Why do you think the CBSL Executive Grade officers deserve the salaries they draw? Do you think they could earn more if they join the private sector or international institutions? And, how many of them have left CBSL in recent years for better prospects?

A: Only a limited number of university graduates with First Class or Second Class Upper, who score highest at a competitive examination held independently, join the CBSL as Executive Grade officers. They are the top candidates who would easily obtain employment elsewhere if the CBSL salary is not competitive. Once they reach mid-level, they are specially trained for central banking and their special skills give them a wider market reach. Between 2022 and 2024, 100 staff members left CBSL and found employment abroad.

Q: CBSL minor employees draw higher salaries than many senior public officials? Don’t you think this is unfair?

A: I admit that there exists such an anomaly, which has been a legacy issue for two reasons. First, many minor employees were recruited to CBSL between 2008 and 2010 without a rigorous competitive process. Secondly, once they are recruited, they cannot be left out in salary determination in collective agreements as they are also part of staff and members of trade unions.

Q: What have you got to say to those who are out for your scalp?

A: I would like to reassure the public that the recent pay rise planned at CBSL has been conducted in accordance with all proper legal avenues and in the same manner as all other pay rises at the CBSL over its history.

I also want to reassure the people that their concerns will not go unheeded, and I appreciate the voices being raised as we are determined to take this opportunity to review the way we do things. We acknowledge that these are very tough economic times for everybody and there have been ethical issues raised about the timing of these measures, etc. We hope to give these ethical issues the due consideration they deserve.

I believe in the hard-working people of the CBSL and the hard-working people of our nation. I hope that a day will dawn when every worker gets a wage that he or she is satisfied with, including at the institution under my purview and elsewhere.

Q: Don’t you feel hurt when you come under fire?

A: I would say ‘hurt’ is the wrong word to use in this instance. I do sometimes feel disappointed when my energy as well as attention is forced away from the main task that I hoped to achieve when I returned to CBSL. My intention is to work for the betterment of Sri Lanka and support the CBSL staff on that journey. This is why I have been able to make difficult decisions. This is also why I am always open to receiving feedback from genuinely concerned parties. It is, however, an unnecessary diversion of energy and time when it comes from more political and disingenuous quarters.

(The interviewer is Deputy Editor of The Island.)