The monetary board of the Central Bank has dissolved the board of director of Seylan Bank. Operations of Seylan Bank have now been brought under the Bank of Ceylon.
CB said in a statement today (Dec. 29th), “The attention of the Monetary Board has been drawn to the recent events in the Ceylinco Group and the difficulties being encountered by Seylan Bank PLC with regard to deposit withdrawals and ensuing liquidity problems.”
“The difficulties of Seylan Bank PLC presented a potential danger to the stability of the financial system,” it said.
The CB said it was retaining the current chief executive officer and employees.
BoC has been tasked with carrying on the business of the bank and to appoint a new board of directors to the bank.
The Ceylinco Group has already announced that it was planning to sell out of Seylan Bank to repay depositors of Golden Key Credit Card Company, which ran into a liquidity crisis.
The sale of Seylan shares ix expected to proceed while the BoC performs a caretaker role in running the bank.