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Why aren't SEC, CSE heads stepping down?
The recent happenings at the two main statutory bodies controlling the stock market is shameful to say the least. It has now become an embarrassment to the UNF government which campaigned on a policy of openness and transparency.

It is the view of many that both these officers, Chairman - SEC and Chairman - CSE, should honorably resign, paving the way for an impartial inquiry to proceed. As long as the two heads are around, it will be naive to believe, particularly in our culture, that their subordinates handing the inquiries, would act impartially and bring disrepute to their own bosses who are only 'temporarily away'.

The two individuals with numerous conflicting interests cannot be relied upon to put the public interest before self. The Colombo Stock Market has seen more downs than ups and continues to be in the doldrums despite the fiscal stimulus and low interest policies of the government. In this scenario wary investors at least need the assurance that the SEC and CSE, the two main stock market related bodies, are headed by two individuals of undoubted integrity.

Cleatus Jayawardena,
Moratuwa.

More development banks - not less
With the National Development Bank (NDB) seeking Central Bank permission to convert itself into another commercial bank, its corporate objectives would change from ''long term development of the country and its production capacity'' to the narrowly defined ''return to shareholders'' and ''shareholder value".

During my 40-year banking and consultancy career I have seen many industrial giants of today who started as unknown entities thanks to the NDB's credit lines. In many cases they had been rebuffed by other state and private banks either due to the absence of good security or because banks who were only used to granting overdrafts and three-year loans did not have the capacity to evaluate long term project proposals.

If banks like NDB turn their back on the budding, small and medium scale entrepreneurs, there will virtually be no other institution to give a helping hand to this vital segment of the economy. The grave consequences of ignoring the rural sector have twice surfaced in the form of youth insurrections, a point to remember since the country cannot afford to repeat the same mistakes.

NDB's shift of focus is happening at a time when their expertise and resources are most needed to channel the millions being assigned by foreign donors to develop the country, particularly the North and East.

Of late, NDB too has been more keen on mobilising short term deposits through their commercial banking arm rather than acting as the intermediary for channelling development assistance. Given the needs of the time, we need more development banks, not less.

D. L. C. Fernando,
Mattakkuliya.

Parate rights no solution for Pramuka
The present crisis, according to the Chairman of Pramuka Bank, is because of the non-performing advance levels being high. But he has stated that most of these advances were granted with immovable property as collateral and thus recoverable.
He had added that if "parate execution" was available to the bank the position would have been different.

If a bank lends with the intention of recovering the loan by seizing the collateral, it is bad lending. Seizing the collateral should be the last resort. Even if parate execution was available to the bank, what good would it have been if, as reported, the property mortgaged had been highly overvalued? Even if the property had been correctly valued, how do you convert it to rupees if there are no buyers at the expected price? Bad lending of depositors' money is almost a breach of trust.

No blame should be attached to the Central Bank, because it relies on the returns sent by banks. If a bank grants a loan and confirms to the Central Bank that the loan is regular, what can the Central Bank do? It is fortunate that the Central Bank took this step and thereby stopped the bank's financial position from getting worse.

Retired senior banker,
Dehiwala.

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