State banks to bring in experienced professionals as banking heads
The Finance Ministry is now clearing high level procedures in appointing heads to state banks almost two months after the reinstatement of the UNF government with the aim of invigorating the state banking sector with experienced professionals.
Most of the state banks are currently embroiled with dysfunction in policy and decision-making in managing and administering its key financial and legal matters as the boards of directors of these banks are still to be reconstituted.
Although, Finance Minister Mangala Samaraweera re-appointed Ronald C. Perera, PC, as the chairman of the Bank of Ceylon (BOC) on Thursday and Deputy Secretary to Treasury A.M.P.M.B. Atapattu as the acting Chairman People’s Bank (PB) on Wednesday, boards of directors of these banks are still to be reconstituted under the present administration.
A renowned banking professional with over 40 years experience will be appointed soon as the chairman of the National Savings Bank as his nomination has been cleared by the Presidential Committee, a senior Treasury official said.
According to the rules at state banks, the management and administration of the affairs of the bank shall be vested in a board, consisting of six directors appointed by the subject Minister.
All these state banks have now been brought under the Finance Minister who is authorised to nominate the names of chairmen and board of directors for the President’s approval.
However in accordance with the current procedure the credentials of those nominees have to be scrutinised by the Presidential Committee headed by senior presidential advisor W.J.S. Karunaratne before forwarding the names of nominees for the President’s approval.
Issues facing banks have been brought to the notice of the President and the Prime Minister in separate letters sent to them by the Ceylon Bank Employees Union (CBEU), its Secretary General Ranjan Senanayake told the Business Times.
Although the daily functions of state banks are being carried out without any interruptions, administrative affairs and key policy decisions such as approving big loans and major staff issues cannot be carried out without board approval, he said.
This situation will aggravate the number of loan defaulters as they are aware of the difficulty faced by banks to take legal action against them without a board decision, he said. This will also affect businessmen who need bank overdrafts to carry out their business activities.