September 01, 2007 (LBO) – Sri Lanka’s central bank, which regulates the country’s financial system, has sought the views of the banking community on new draft corporate governance rules for banks. “The need for a mandatory code of corporate governance arises due to the significance of the business of banks in the economy and current global developments in corporate governance practices,” the Central Bank said in a statement.
“Banks carry on business by mobilizing funds from general public.
“Weak governance could lead to banking failures which could eventually undermine the public confidence in the banks. Therefore, it is necessary that banks are managed with prudence and accountability.”
The regulator said it was following on from a monetary and financial sector policy roadmap published in January.
Central Bank says it is “soliciting the views, comments and suggestions from the stakeholders of banks and the general public in the interest of stability of the banking and financial system,” on the exposure draft.
The proposed corporate governance code would make the board of directors of banks responsible and accountable for management of affairs of banks inclusive of the