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The Central Bank of Sri Lanka (CBSL) has been in the news again- this time for the wrong reason. Questions are being asked about justification, if any, of the unprecedented salary increases they seemed to have helped themselves to when the country is in a soup both economically and socially.

Let us examine different aspects of this action to see if the CBSL could ever justify it on any grounds.

This seemed like a simple case of helping themselves to their hearts’ content just because they are allowed to so by the newly minted “rule book”, meaning the amended CBSL legislation that rightly gave them more independence and freedom from undue political influence. Not a bad idea given what happened in the past, but that freedom was intended to be exercised only in the monetary policy and governance related matters.

Such freedoms are part-and-parcel of many similar government organisation around the world that are required to be fiercely impartial and objective in their policy and operational decisions. However, it’s not a case of having unlimited freedom to do whatever they want with their resources.

Another justification the CBSL seems to be trotting out is that their stuff members are a special breed of extraordinary qualified, talented, and capable people deserving extraordinary remuneration. If not, they’ll apparently flee the Bank in no time and the whole economy will collapse (as if it hasn’t already collapsed in heap!)

Let’s put this argument to the test starting from the bottom, It was reported that lowest positions to be paid relatively fancy sums,(in the Sri Lanka context) such as 200,000 to 300,000 rupees a month, apart from a host of other fringe benefits. These amounts are not only comparable with a government doctor or university teacher gets paid, but also are like three-or four-times a similar category of employee could attract elsewhere. What kind of special capabilities, talents, or qualifications these pampered CBSL employees that justify salaries comparable to those paid to high qualified professionals elsewhere.

We could simply extend that flawed justification upwards to almost all other categories of staff too. The logic and common sense will tell us that any justification would be hard come by.

The CBSL could tell us that they deserve this extraordinary remuneration regime because of huge responsibility they carry in being guardians of the monetary system in the country. But, was it the lack of pay that prevented them from doing a good job so far? Or was it a case of lack of commitment, capability, and honesty?

The worst aspect of this action by CBSL is their blatant hypocrisy in relation to what it has been preaching to the rest of the country about the need to keep the dreaded inflation in check.