June 25 (LBO) – A new board of directors has been appointed to state-owned SME Bank as a first step in a proposed take-over by Lankaputhra Development Bank, an official said. But officials now say RDBs would be allowed to function independently. Lankaputhra Bank chairman A de Vass Gunewardene is the new chairman of SME Bank, former Chairman Moksevi Prelis said.
The directorate is made up of Shiromi Wikremesinghe (CEO of Lankaputhra), Kosala Wickremanayake, S S C de Silva, Palane Amarasinghe, and treasury representative Chandra Wickremanayake.
Both banks were started in the last two years following election promises to give loans to small and medium enterprises.
However critics say they have attracted bad risks, with SME Bank itself at one time finding that 30 percent of loans given had gone bad.
An earlier government plan to merge SME Bank with a network of Regional Development Banks came under fire as the RDBs had a better credit culture and was doing yeomen service in the provinces, helping thousands of small entrepreneurs.
Fitch Ratings Lanka which had rated the RDBs around BBB- (lka) and above put them on rating watch after the government made pub