Sri Lankan private bank to be taken over

Tuesday, 30 December 2008, 02:46 Hrs
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Colombo: Sri Lanka's central bank Monday instructed the country's largest state-owned commercial bank to take over the administration of the third largest private bank, the Seylan Bank, saying that the difficulties it faced on deposit withdrawals and ensuing liquidity problems are posing "a potential danger to the stability of the financial system in the country".

The apex Central Bank of Sri Lanka said that its monetary board, using the powers vested in it under the monetary laws of the country, felt it prudent "to discontinue the services of the current directors of the Seylan Bank and to appoint Bank of Ceylon to carry on the business of the Seylan Bank" with immediate effect.

"The difficulties of Seylan Bank PLC presented a potential danger to the stability of the financial system. Therefore, the Monetary Board is of the view that immediate measures require to be taken to stabilise the financial system," the central bank said in a statement Monday.

According to the statement, Bank of Ceylon has been instructed "to appoint a new board of directors of Seylan Bank and to continue with the services of the present CEO and all current employees of Seylan Bank PLC, without any interruption".

It said that Seylan Bank, which is considered a good deposit-base private bank, will be open for usual business with customers Tuesday.
Source: IANS
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