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Sweet Revenge

June 22, 2006 (LBO) – Sri Lanka announced plans to set up a special company to take over bad debts of state banks and revive the failed Pramuka Bank under a new tag – Sri Lanka Savings Bank, Treasury Secretary P B Jayasundara said Thursday. Last year, the four banks reported non-performing loans of around 32.45 billion rupees after lending 403.36 billion rupees. The government will pump in the 1.5 billion rupees minimum capital requirement with necessary laws to set up the bank due to before parliament on July 7.

"All deposits of Pramuka Bank will be absorbed into the new bank. But I appeal to depositors not to withdraw their funds for at least a year unless for emergencies, because we need some time to stabilise the bank," Jayasundara told a meeting of depositors, central bank officials and newly appointed directors of the Sri Lanka Savings Bank.

'Beyond Means'

Wickremasinghe, says the new bank will play a key role in raising the country's savings rate.

He said Sri Lanka had a low savings rate, while India, which had a lower per capita i
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