A major shuffling of Department Heads took place in the Central Bank after former Governor Arjun Mahendran took office, Secretary to the Monetary Board H. A. Karunaratne said.
Altogether, 34 transfers took place in 2015 among 30 CBSL department heads, he said.
Karunaratne was testifying before the Presidential Commission of Inquiry to Investigate and Inquire into the Issuance of Treasury Bonds.
Monetary Board Secretary Karunaratne said the first set of transfers including 14, took place in mid January2015 and the next wave of 20 came in September the same year.
“I have worked under eight governors and never in my entire service did I witnessed such a major shuffle,” Karunaratne said. He said the transfers should be done in a consultative process among senior management of the CBSL, but Mahendran did not take any such step. "The CBSL usually undergoes around 250 Department Head transfers. After Mahendran came, it went up to a 500," Karunaratne said.
When asked if anybody confronted Mahendran about the transfers, Karunaratne said, in fact, they did but with no result. "Myself along with Ebert Silva, Deputy Governor Sepala Ratnayake and Director of Legal Nandasiri went twice to the Bank House to meet Mahendran to discuss our concerns regarding transfers. Mahendran agreed with us to be more consultative, but he never spoke to any of the high ranks when he carried out the transfers in September 2015," Karunaratne said.
Meanwhile, the Commission had double checked if Karunaratne did indeed meet Mahendran at the Bank House, which is the official residence of the CBSL Governor, and confirmed that he visited it twice. Karunaratne confirmed that he met Mahendran twice at the Bank House.
Supreme Court Justice P. Jayawardane asked whether it is reasonable for a new institute head to make changes in a staff that has fallen into a routine for a long time, to which Karunaratne said many of the heads have not been in their respective posts for a long time.
When asked as to why Karunaratne and a majority in the CBSL were not in line with these transfers, Karunaratne said most of the changes were unhelpful.
"For example, the Head of International Operations was transferred to the Communication Department. The Head of Supervision was transferred to Exchange Control.
The Head of Exchange Control was sent to the Regional and so on. These departments were enjoying specific expertise from their heads when they were transferred," Karunaratne explained.
State Counsel Shaheeda Barrie led the evidence.
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