COLOMBO (EconomyNext) – Workers of Commercial Bank of Ceylon have expressed serious concern over an attempt by Sri Lanka’s new administration to appoint a chairman of the board using shares owned by a state managed pension fund.
The Association of Commercial Bank Executives and the Commercial Bank Branch of the Ceylon Bank Employees Union have asked the Central Bank’s bank supervision department to halt an attempt by the state to appoint a lawyer as its chairman.
The unions say they have become aware of a proposal made in writing by a deputy governor of the Central Bank to appoint a lawyer, Nissanka Nanayakkara, as director and also chairman of Commercial Bank.
"Whilst recognizing the interest of the Employees Provident Fund, acting as a shareholder to nominate suitable person to the Bank’s Board, we cannot condone this attempt to go the extent of even suggest that this party be appointed as Chairman of the bank," the unions wrote to the director of bank supervision of the Central Bank.
The Unions say Commercial Bank’s Chairman has always been appointed by a majority decision of its members, and all chairmen have acted in the best interest of all shareholders in the past.
The practice of buying up shares in private banks by state entities including the EPF, exceeding the ceilings on bank ownership set by the Central Bank itself was started by the Rajapaksa administration.
During the Rajapaksa regime several directors were appointed to private banks, including the Commercial Bank and Hatton National Bank, generating concerns.
There were strong expectations that the new administration will reverse the questionable practices of the last regime as it was voted into office on a platform of good governance.
The Chairman of National Development Bank, Sunil Wijesinghe, a respected senior business executive also stepped down. In the mid-1990s Wijesinghe who represented the Employees Trust Fund was removed by the labour ministry, then headed by former President Mahinda Rajapaksa.