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Following the court ruling that the Central Bank of Sri Lanka should consider several alternative steps to safeguard the interests of deposit holders of Pramuka Savings and Development Bank, the depositors are now eagerly awaiting an opportunity to discuss their restructuring proposal with the CBSL.

The PSDB Depositors Association and Pramuka Stakeholders Association recently formed a Pramuka Bank Restructuring Committee headed by former Ceylon National Chamber of Industries (CNCI) Chairman K.C. Vignarajah. "The committee presented a restructuring proposal to the Monetary Board with the main objective that the CBSL worked together with the depositors and shareholders to revive the collapsed Pramuka Bank and thereby develop confidence among the public in the banking industry in Sri Lanka by reviving PSDB," Vignaraja told the Daily News yesterday.

The Committee has proposed to induce the conversion of liabilities of the bank to equity in the best interest of the depositors in order to revive the bank. It also proposed rescheduling the maturity dates of deposits, reducing interest rates on deposits in line with current market rates, actively pursuing loan defaulters and recovering monies due to the bank, securing Parate execution rights and obtaining a commercial banking licence.

The two associations have called upon the CBSL to take immediate action to consider their restructuring proposal and release the relevant data in order to fine tune the proposal.

The Associations President Ranjan Arambewela said that the objectives of the plan cannot be fulfilled until the present directors of the bank are removed. Around 15,000 deposit holders who had deposited approximately three billion rupees have been affected by the collapse of the bank.

The proposal also stated Acland Holdings which is the largest shareholder of the PSDB and their associate company National Insurance Corporation Ltd. also holds a large stake in the bank.

"They were deeply concerned about the plight of the depositors as well as their own interests. Their group has the advantage of a wide spread branch network and also has an investment with Janashakthi Capital Ltd. They were the obvious choice to approach this issue as a strategic partner within the limited time available to present a proposal," it said. K.C. Vignarajah is the Managing Director of AIMS Apparel Industry Management Services.

Vignarajah said following the court ruling he along with the depositors contacted the Central Bank and offered their unstinted support to act in the best interests of the depositors and the financial sector, as soon as the CB decides on the course of action.

"Central Bank officials said they will contact us and arrange a meeting to discuss the draft proposals. Time is of essence and urgent action is required to preserve assets/reduce mounting losses and liabilities of the bank.

For example there are cases of loans given out on the security of food stocks which are perishable, and or passed the expiry dates. Who will bear these losses due to inaction?' Vignarajah questioned. (CK)

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