Business Times

NSB Chairman, directors must step down - BT Poll

Kariyawasam defies unions

A quick poll on Thursday by the Business Times (BT) on the crisis at the National Savings Bank (NSB) vis-à-vis a tainted stock market transaction, found near-unanimity in the call for the removal of bank chairman Pradeepa Kariyawasam and its directors.

The poll which drew more than 400 respondents, from different professional and civil society segments, also saw 100 % of the respondents saying the authorities "had failed in their obligation to the public on the right to know and information about the affairs of a state bank."

The BT, as the crisis at the country's main savings bank grew following a refusal by Mr Kariyawasam to step down which resulted in a wildcat strike by unions, on Thursday sent out the email questionnaire asking: (1) Should the transaction be reversed? (2) Are the SEC and CSE slow in their response? (3) Should the SEC cancel the multi-million rupee (Rs 390 million) deal? (4) Failure on the part of the authorities to issue a statement on the crisis? (5) Failure to inform the public on the status of the bank? And, (6) Should the NSB chairman and board of directors be sacked? The response was tremendous and comments poured in during a 3-hour period. Though the poll closed on Thursday (3 pm), comments and responses continued to flow in on Friday reflecting public concern and a plea to be heard.

On the 6th question about sacking the NSB chairman and directors, 91 % of respondents endorsed this view.The only question where the response was somewhat mixed (with 'ayes' totaling 59 %) was 'should the SEC cancel the deal'. Many of the brokers and investors were not in favour saying this would erode confidence in the market but were more in favour of a reverse transaction through the market, while others said there is no provision to cancel the deal.

Respondents were also critical of the SEC and CSE with 91 % agreeing that the two institutions were slow (and are yet to even make an official statement - apart from comments made by the SEC chairman) in their response to a deal that has turned sour. The transaction has been roundly condemned and NSB unions have been flexing their muscles bracing for tougher action if Mr Kariyawasam remains in office.
"The NSB has seriously betrayed the trust and confidence of its (claimed) 16 million depositors. I withdrew my child's savings account years ago when I saw the rot set in. In this competitive banking environment, we do have a choice. There is NO comparative advantage in banking with NSB," one respondent wrote.

Another agreed that a statement should have been issued by the Government or the Central Bank. "The statement issued by the NSB (through a small Page 1 advertisement on Sunday) was pathetic to say the least. It conveyed a serious lack of governance and transparency, not to mention the lack, also, of a clear strategic direction as to why the bank contemplated this purchase," this respondent noted, adding "the explanation was worse than the crime!"

He said this is no ordinary state bank as a large proportion of the Sri Lankan population has reposed their trust in the bank by depositing, in some cases, all their savings. "The public is entitled to reciprocity for this trust by way of exemplary governance procedures, checks and balances. From what has been stated in the media with respect to this transaction, the NSB does not seem to have such governance procedures and controls and this is an affront to the trust that the public has placed in this institution," he added.

Public rights activist Nihal Sri Ameresekere, who has also raised the issue in a case before the Supreme Court, said the SEC and CSE comprising of Government-appointed persons appear to be subserviently lukewarm. "The direction to act as per the statute and regulations must necessarily come from the very top i.e. the Minister of Finance and the Secretary, against whom and others, disregarding Supreme Court findings he questionably did not enforce the law, amply demonstrating scant respect for the rule of law," he added.

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