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| Saturday, 24 January 2004 |
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Pramuka permitted to resume operations in July The Central Bank's Monetary Board has decided to permit the Pramuka Savings and Development Bank (PSDB) to resume business from July 22, 2004 subject to several conditions. In a news release yesterday, the Central Bank said the PSDB should confine its operations initially to the recovery of its loans and advances, without accepting/repaying deposits and disposing assets. No Central Bank funds would be provided for the resumption of business by the PSDB, it said. The PSDB will be under the Central Bank's Director of Bank Supervision. The Central Bank said out of the proposals submitted for PSDB's restructuring, only Asia Capital's offer merits any further consideration. It was the only proposal where a firm commitment was made to infuse capital to the PSDB. They had committed to infuse Rs.500 to Rs.600 million before taking over the business, but after attending to negotiations with depositors and creditors. The Central Bank said the Monetary Board decided to test the Asia Capital proposal's feasibility as against the only other option of liquidating the PSDB. "In forming this opinion, the Monetary Board took cognisance of the fact that even though as currently estimated, the depositors may finally receive around 60 per cent of the capital on deposits on liquidation, there were other creditors such as those who have invested funds in money market bills of PSDB who would not have qualified for any repayment as they would not be treated as depositors in a liquidation". The Central Bank said it retained the right to suspend PSDB's business again if the Asia Capital proposal cannot be implemented in a viable manner. |
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