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| Sunday, 22 December 2002 |
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Business |  |
| News Business Features Editorial
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Pramuka Liquidated The five year old Pramuka Savings and Development Bank Ltd (PSDB) which operated only within Colombo will be liquidated and its license cancelled on the direction of the Monetary Board of the Central Bank. The banks operations were suspended on October 25 by the Central Bank due to it being ill liquid and insolvent. According to Bank sources it had deposits and cash totalling Rs. 3.5 billion. Chronicle of Events * PSDB started operations in 1997. Around year 2000 there are rumours that the bank is illiquid however confirmation of the allegations is not possible until the suspension. *October 25 2002- Central Bank suspends operations of PSDB. *December 3 2002- Udaya Nanayakkara is appointed as Chairman of the PSDB with the voluntary stepping down of its previous Chairman Rohan Perera. Mr Nanayakkara was a director of the bank prior to his appointment as the Chairman. *December 13, 2002- The Board of Directors of PSDB meets the Monetary Board to respond to the findings of the Monetary Board. The banks operations are cited as "mismanaged, unsound, improper and imprudent" by the Central Bank. *The Board of directors at the meeting while not objecting to the finds and observations of the Central Bank makes a proposal to resume the business of PSDB which involves Rs 600 million being made available to PSDB. *However, the PSDB board and shareholders does not demonstrate any commitment to contribute any funds to revive the PSDB. *According to the estimation of the auditors and the Central Bank a much larger sum than Rs. 600 million is required to revive the bank. *In the absence of a commitment by the directors and the shareholders to bring in additional funds to the PSDB, the contributions are required from the tax payers funds. *December 19- The Central Bank decides to wind up the business and cancel the license of PSDB. |
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