Regional Development Bank framework ready merging six banks

By Bandula Sirimanna

A Regional Development Bank is to be set up by merging Ruhunu, Rajarata, Sabaragamuwa, Kandurata, Uva and Wayamba development banks which are now operating as self-governing banks with its own boards of directors in specified provinces.

The framework of the setting up of this bank has already been devised and the draft bill to give legal effect to the merger will be presented in parliament in June this year. A senior official of the Finance Ministry told The Sunday Times FT that all arrangements to set up the bank will be finalized in May.

He disclosed that discussions with trade unions and employees of these banks to seek their views and suggestions have been completed successfully and all of them have given their consent to set up the new bank which is unique to Sri Lanka. The six development banks will operate under the proposed Regional Development Bank and a CEO will be appointed to each of these banks.

The CEO will be one of the 13 directors of the Regional Development Bank. The capital investment of the bank is Rs. 2.8 billion and Ruhunu, Rajarata, Sabaragamuwa, Kandurata, Uva and Wayamba development banks will function under the Regional Development Bank but maintaining their individual identity, he said.

Each of these banks will be given the authority to implement their own banking products and services with the consent of the board of directors of the Regional Development Bank. The proposal to merge these banks was made in the government’s 2007 budget.