Pulse Gets Weaker

Government may have to re-capitalize People’s Bank for the third time, if the bank is to meet capital adequacy requirements next year. Government may have to re-capitalize People’s Bank for the third time, if the bank is to meet capital adequacy requirements next year. With privatization no longer an option, the bank is to forward alternate proposals to government by the end of this month.

The bank faces a capital shortfall of Rs. 11 billion to meet the minimum Central Bank capital adequacy requirement for commercial banks.

Half this capital will have to be tier one, which can only be raised through a capital infusion or through retained earnings.

The People’s Bank says the government might consider re-capitalizing the bank based on the restructuring plans it submits to the Strategic Enterprises Management Agency (SEMA).

“There are a few options for recapitalization including restructuring proposals,” says Asoka de Silve GM, People’s Bank.

“People’s Bank has tabled a restructuring plan internally. It has been submitted to the authorities. The Ministry of Finance is looking into the problem including how we think we ca