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| Tuesday, 3 June 2003 |
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Two Assns. submit restructuring proposal for Pramuka Bank By Channa Kasturisinghe Two associations representing depositors and stakeholders of the suspended Pramuka Savings and Development Bank (PSDB) have submitted a restructuring proposal to the Central Bank of Sri Lanka (CBSL) nominating a new Board of Directors headed by the past Chairman of the Ceylon National Chamber of Industries K.C. Vignarajah. The PSDB Depositors' Association and Pramuka Stakeholders' Association last week presented the proposal to the CBSL Deputy Governor Dr. M.P.Nagahawatta, calling upon the CBSL to take immediate action to safeguard their interests in terms of the Banking Act No. 33 of 1995. Their main proposals were the conversion of the deposits and borrowings into equity for the purpose of infusing new capital to the Bank and to uplift the deposits and borrowings subject to an agreed limit within six months of reopening the bank. The proposals also included deferring of withdrawal of a percentage of the deposits and borrowings for two months after re-opening, payment of interest on deposits and borrowings for two years after re-opening and infusion of the minimum estimated equity capital. The President of the PSDB Depositors' Association, Ranjan Arambewala told the Daily News that their main objective was to ensure that the CBSL worked together with depositors and committed shareholders to build and develop the confidence in the banking industry of Sri Lanka by reviving the collapsed bank. "Such an action would also prove to the world that Sri Lanka could resolve any crisis in the banking sector through committed participation and cooperation of the regulatory authority and stakeholders. It would also safeguard the interests of everybody who deposits their money in any bank in Sri Lanka. He said the associations' aim is not only to safeguard the depositors but also the borrowers and shareholders who were not responsible for the Bank's crises. The two associations earlier requested the Bank's Board of Directors to resign from their posts to allow the implementation of the PSDB Restructuring Proposal. "We are confident that the money of the depositors of the collapsed Pramuka Bank could be secured only by restructuring the bank. The restructuring will be possible only by the submission of a viable proposal that would be acceptable to the Monetary Board. Two parties had submitted proposals to reopen Pramuka Bank but the CBSL rejected them as they were not prepared to infuse the Rs. 600 million to meet the CBSL requirement. At our request Janashakthi Capital Ltd, one of the biggest shareholders of PSDB also agreed to offer a restructuring proposal to reopen the Bank," Arambewala said. |
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