BOC investment in Seychelles: Is Finance Minister right in sacking GM?

Wednesday, 8 April 2015 00:00 - - {{hitsCtrl.values.hits}}

I read with concern

the news item that the Finance Minister Ravi Karunanayake has taken steps for the suspension of the duties of the General Manager of Bank of Ceylon. One website gives the opening of a branch office of Bank of Ceylon in Seychelles as the reason for such suspension. If this statement is factually correct legally it is the Monetary Board of Central Bank of Sri Lanka and the Board of Directors of Bank of Ceylon who should be made accountable for such action because Section 12(1) (b) of the Banking Act requires the approval of the Monetary Board and the concurrence of the Minister for Bank of Ceylon to open a branch office outside Sri Lanka. Section (1) and (2) of the Banking Act is quoted below for easy reference. 12. (1) The written approval of the Monetary Board given with the concurrence of the Minister, shall be required— (a) for a licensed commercial bank to open or close a branch, agency or office of such bank, in any part of Sri Lanka or to effect a change in the location of any existing place of business; (b) for a licensed commercial bank incorporated or established within Sri Lanka by or under any written law to open or close a branch, agency, or office in any place outside Sri Lanka, (c) for a licensed commercial bank to acquire the business of another licensed commercial bank or of any branch of another licensed commercial bank; (d) for any person or nominee of such person, partnership, company or corporation to acquire a material interest in a licensed commercial bank incorporated or established within Sri Lanka by or under any written law; For the purposes of this paragraph “ material interest ” means the holding of over ten per centum of the issued capital of such licensed commercial bank; and (e) for banks incorporated or established outside Sri Lanka to open a representative office or such other place of business within Sri Lanka. (2) The approval under this section may be granted subject to such terms and conditions as may be specified by the Monetary Board with the concurrence of the Minister. If the branch office had been opened without the prior approval of the Monetary Board, the Director of Bank Supervision Department should have taken action earlier. Further, how did the Controller of Exchange grant permission to remit funds to establish a branch office without the required approvals? Senehe Perera