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Saving Grace

Mar 08, 2008 (LBO) – State-run Sri Lanka Savings Bank, started to take over operations of defunct Pramuka Bank, will get a 1.5 billion rupee government guarantee to meet minimum regulatory capital, officials said. . "The capital requirement is met out of government funds, we are in a comfortable position to offer capital of 1.5 billion," treasury secretary P B Jayasundera said.

"The letter has already been issued to this bank."

The closure of Pramuka Bank in October 2002 left 15,000 unhappy depositors and other creditors unable to recover their money.

The bank was to be liquidated by the Central Bank, its regulator when a policy change to start a new bank was taken by the Rajapakse administration with public money.

"We are confident the bank can be built without a burden to the budget during the next few years," says Jayasundera whose office has been coordinating its setting up during the last two years.

President Rajapaksa will open the new bank, which has its main office at Borella, on Monday.

"Immediate depositors liability is not a problem, the [Pramuka] bank had around 600 million rupees, on top of that there are several mortgage assets...[which] are sufficient to meet the dep

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