Musical Chairs

About 228 directors presently sitting on boards of Sri Lankan commercial and specialised banks may soon be out of job, if they fail to pass the Central Bank’s upcoming litmus test. About 228 directors presently sitting on boards of Sri Lankan commercial and specialised banks may soon be out of job, if they fail to pass the Central Bank’s upcoming litmus test. More stringent qualifications to become a bank director are set out in the new changes, making it illegal to sit on boards of two banks, unless they are associate companies.

Sri Lanka’s Central Bank is now drawing up guidelines to shake out directors who fail to meet the new ‘fit and proper’ criteria.

The term may sound vague or absurd to the legal eyed, but the Central Bank is pretty serious, following a few banking irregularities and the collapse of Pramuka Savings & Deposit Bank.

“This is a new thing that has been included in the recent Banking Act amendments that were quickly passed through parliament last December without much of a debate,” notes Dr. Dayanath Jayasuriya Attorney-at-Law and Chairman of the Securities & Exchange Commission.

Sri Lanka currently has 22 commercial banks and 14 specialised b