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| Sunday, 18 January 2004 |
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Pramuka Restructuring Committee awaits Central Bank decision The Monetary Board of the Central Bank will have to decide whether it is going to reopen, re-suspend or liquidate the Pramuka Savings and Development Bank Ltd. (PSDB) as the time frame given by the Court ends on January 21, 2004. Chairman of the PSDB Restructuring Committee, K.C. Vignarajah said: "We are hopeful that a good decision will be given by the Central Bank based on the proposals submitted by us". The Central Bank has received financial proposals from Asia Capital, Richard Peiris and a consortium related to the construction industry, but to come to a final decision, they have to talk to us, said Vignarajah. The absence of a solid "offer document" or accurate updated data were great disadvantages. "We worked hard to obtain these, and the Central Bank was able to obtain some data which were finally clarified at our meeting on December 18, 2003. As stated by us at that meeting, we were still required to make many assumptions, which could make any proposal invalid if incorrect". "We also stated that the Central Bank with its consultants should prepare an attractive 'offer document' for inviting the best proposals. We would do it within three months, if we are in charge of the accurate facts. "We formed the concept of the conversion of a portion of deposits and liabilities to equity, the write-off of a portion of interest dues, delayed repayment of balance portions of deposits, aimed in the ultimate analysis, to primarily benefit the equity of the depositors themselves. "The strategic partners and investors who venture to help them, while helping themselves in an equitable manner, would become shining examples of Corporate Social Responsibility, partnering in a very unique way to build up the equity value of the small and medium depositors, who are the backbone of the financial strengths and dynamism of the country, through their savings deposited in banks, and other financial institutions, investments in stocks and shares and debenture issues. Their morale must be sustained, and this is a glorious opportunity to energise and motivate the investing public, that in the rare event of failure of an institution, there would be creative talent; private sector brethren who would come to their rescue. And will not Sri Lanka be deemed a paradise, also for investors?" Vignarajah stated. "We do not request the State for subsidies or hand-outs, that ultimately makes us all beggars as a nation," he stressed. Obtain acceptance of the unassailable concept that the depositors and stakeholders be given the responsibility and accountability for the future course of their net assets. "Adequate support of the authorities, for the Pramuka Bank Restructuring Committee (PBRC) and the new Board to be quickly given the responsibility and authority to ascertain the actual position of our assets and liabilities, access more accurately the strengths and weaknesses, opportunities as well as threats, and clean up the books". The Chairman of the PBRC had put forward a plan for the restructuring, which makes the actual owners, the depositors and stakeholders, to take charge under Central Bank patronage, do a survey, recover debts, clean up the act and offer the results in a transparent manner for attracting the best bid. The PBRC Chairman wanted solid down-to-earth facts, so that a precise, open and transparent proposal can be made and the best strategic partners obtained. He also had planned resources to pay Rs 100 million to depositors within six months. About 13,500 depositors will receive upto Rs 50,000 (on their choice of deposits and/or equity), which will add up to Rs 65 million. He also had provided another Rs 35 million as additional reserves, for further relief to hard-pressed depositors in the first six months. The balance liquid funds of Rs 702 million would be available to attract any good partner or collaborator, who would add value to the equity of the depositors and stakeholders. The operations of the five-year old PSDB were suspended on October 25, 2002 by the Central Bank, which decided to wind up the business and cancel the licence of PSDB on December 19, 2002. It then had 160 employees and 15,000 account holders. |
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