APB expresses concern over methodology adopted to remove CEOs of 2 State banks

Sri Lanka’s premier professional association for bankers, the Association of Professional Bankers (APB) has expressed grave concerns over the arbitrary methodology followed by the government in removing the chief executive officers/general managers of two State banks.

A statement by APB said the move has undermined the values of good corporate governance and professionalism in the eyes of foreign investors, correspondence banks and independent credit rating agencies. 

“The appointment of a chief executive officer of a bank, so appointed after a due process reflects the trustworthiness, integrity and competence of the individual so chosen to lead the bank. 

“Due to this reason, it is firmly believed that a due and transparent process should be followed, if the necessity arises in the opinion of the shareholders, to remove a chief executive officer of a bank from office,” APB statement said.

“It is in this context that the Association of Professional Bankers-Sri Lanka, the premier professional association of bankers, wishes to express its grave concern on the methodology adopted during the recent removal of Chief Executive Officers/General Managers of two State banks from their offices. 

“Also, it is learned with grave concern that the said Chief Executive Officers were career bankers whose fit and proper status have been approved by the Central Bank of Sri Lanka,” the statement noted.

As the bankers owe various specific duties to multiple stakeholders including customers, regulators, shareholders as well as to the society and to the country’s economy at large, APB pointed out that key management personnel including chief executive officers and the board of directors of licensed banks are being chosen after a thorough examination of their “fit and proper” suitability with the approval of the financial sector regulator, Central Bank.

In particular, the association emphasised that a chief executive officer of a bank is an individual who built his or her professional career after having risen through the ranks, chosen purely on seniority and merit to lead the banking institution.

Hence, APB urged the respective authorities to take remedial steps to restore the confidence professionals and all other stakeholders, which has been tainted due to the recent developments. 

The APB went on to note that such remedial steps are also crucial to shore up the country’s image as a shining example of public and private sector administration upholding the values of good corporate governance and professionalism in the eyes of foreign investors, correspondence banks and independent credit rating agencies.