Governor of the Central Bank of Sri Lanka Ajith Nivard Cabraal has issued a special order banning all loans to the Ceylon Petroleum Corporation (CPC), bank sources said.

The Governor of the Central Bank has already warned the government that the banking system could soon collapse if the Petroleum Corporation continues to receive large loans in this manner.

Cabraal has reportedly told the government that he could not take responsibility for the banking system's collapse under such circumstances

Meanwhile, several heads of the banks have stated that some parties have been pressuring the state banks to continue giving loans to the Ceylon Petroleum Corporation.

When asked about the current situation, Minister of Energy Udaya Gammanpila he said that the Ceylon Petroleum Corporation has reached the maximum limit of borrowing.

He said, "if this goes on, there could be a shortage of oil in the future and the only solution to the problem is to remove the taxes imposed on oil."