Restrictions on bank shareholdings

K.C. Vignarajah, a shareholder in many Colombo firms who has in recent years along with others fought for the rights of minority stakeholders, has praised the Central Bank Governor Nivard Cabraal on the recent restrictions on holdings in commercial banks.

In a letter to the governor – and copied to newspapers –, Vignarajah said: “There has been a perception that I was always critical of the Central Bank (CB). The instances where the CB drew serious criticism was the attempted liquidation of Pramuka Bank, and the indirect move by an individual to dominate the financial aector acting through, and / or in concert with DCSL, SLI, HNB, DFCC, DFCC Vardhana, NAMAL, etc. etc. in the matter of obtaining control of Commercial Bank.

Therefore it gives me particular pleasure to congratulate you, in coming out strongly to impose necessary restrictions on shareholding in Licenced Commercial Banks. I have also drawn attention elsewhere to your excellent work in drawing up a ‘Code of Ethics’ as President of the Institute of Chartered Accountants in the early nineties for members of that institute.

The latest occasion I drew attention to it was in a letter to the Secretary to the Treasury requesting his influence to ensure good Corporate Governance in public companies and also that the SEC, Council of ICASL and CSE acts fairly and vigourously to seek accountability and transparency which would energise the stock market to spectacularly enlarge the investing public. I commended the President and his actions which encouraged higher Dividend Payout and equitable treatment of shareholders.”