Many bank directors may step down

Many top names in the banking industry will be compelled to step down as bank directors with the advent of the new governance regulations for local banks from the Central Bank.

“In almost all banks some directors will need to step down in order to comply with section 3 (2) of the Banking Act Direction No. 11 of 2007 – Corporate Governance for local banks,” a banking industry analyst said.

As these rules stipulate, at HNB there are five directors who fall into the two categories of the maximum tenure of nine years and the maximum age limit of 70 years, namely Rienzie Wijetilleke, Dr. V. P. Vittachi, D. H. S. Jayewardena (Harry), M. V. Theagarajah and R. K. Obeysekara.

At Commercial Bank, out of the 10 directors including its chairman Mahendra Amarasuriya, Dr. H. S. Wanasinghe and B. R .L. Fernando would be the first to step down. “Dr. Wanasinghe is over 70 years old and the other two directors have each served over nine years,” a senior Commercial Bank officer said. At NDB Bank, there are only two directors – S. T. Nagendra and G. C. B. Wijeyesinghe who will need to step down as they are over the stipulated age limit. Nihal Fonseka, CEO DFCC told The Sunday Times FT that at the moment there is no director who has either surpassed nine years at DFCC or who is over 70 years. Sampath Bank has one director – Edgar Gunatunga also its Chairman, who has served more than nine years. Of the 12 directors at Seylan Bank many will need to retire. Senior officials at Seylan refused to comment on the new rules.