20 May, 2022


State Banks, Government, Trade Unions, Et Al

By Rusiripala Tennakoon –

Rusiripala Tennakoon

Recent news surrounding the controversial removal and appointment of General Managers in BOC and PB has caused much concerns in the Banking circles. Trade union retorts that followed the media disclosure about the government decision portrayed a melodramatic series of events marking a departure from the highly responsible and affable CBEU union culture that prevailed throughout in the banking Industry historically. Times have no doubt changed, so the old values. 

Nevertheless, Society needs to be reminded of the relevant reminiscences which reflect the underlying spirit associated with Trade Union actions in the past and to show how the uncompromising attitudes of the then leaders relentlessly contributed to stand out as unflinching fighters for the cause of principles and ideologies. CBEU stood out as a colossal giant against movements that existed succumbed to the influence of bureaucrats. Short spells of party politics overriding the affairs of the union in usurpation of the broad interest of the membership have been successfully defeated. They were able to mobilize the union strength to pitilessly defeat various opportunisms propagated by both left and right winged powers that were. The purity with which they launched such struggles did not leave room for anyone to dispute or renounce them because of the highly democratic approach with a persistent and patient line of action they adhered to in educating the membership about the involved issues. 

Regretfully, the CBEU’s role in this instance appears to have been hasty, premature, prejudiced and remotely influenced. Their pronouncements to resort to indefinite Strike action against the decision of the Government to replace the GMs of the two banks sounded more hilarious with no seriousness of a noteworthy warning! There was no factual or analytical opposition that they could establish and demonstrate to justify their stand. Any Trade Union action that affect the society at large, covering a wide spread membership in one industry cannot be sporadically promulgated in isolation of all other related issues. Perhaps a reasonable discussion of the various concerns and matters in the public domain about the affairs that prevailed in the State Banks could have led to a more sensible approach to the subject.

To make a long story short the recent Parliamentary COPE investigation into the glaring lapses and shortcomings in the management of the PB, revealed by government audit reports would suffice. The Public exposure of these proceedings bear ample evidence of the extremely unsatisfactory administration that existed there tainted with highly irregular and corrupt practices. The Cost to the Government coffers as a result of these abuses and in competencies was very high. The valiant effort made by the GM as the CEO of the Bank to cover up these sordid acts itself could have been impulsive enough to institute some kind of disciplinary action against him. Delinquencies highlighted by the Auditor General and examined by the COPE exposed misconduct, misuse, corruption and exploitation on the part of those responsible and accountable for execution of authority in the Bank. There was no hue and cry from the Trade Unions about those exposures. What a pity!

The reports we hear about BOC is no better. We heard about the highly unethical and unprecedented role play of the BOC in the 2015 CBSL Bond Scam by openly associating with the alleged culprits who are now before the Law. They provided facilitation of Rs. 15 Billion within a matter of minutes to support the Perpetual Treasuries sordid operation. Foreign currency frauds through IT maneuvers running into several hundreds of millions  (875,000/= US$) were recently challenged in courts against the Bank and was ordered to reimburse in full with legal interest and costs.

Both PB and BOC played the cat’s paw role under the directions of the then Minister of Finance by agreeing to stay away from competitive bidding with other Primary Dealers in the alleged Bond Scam of march 2016.

These are matters for concern of all about the performance , administration and proper functions under regulatory provisions in respect of the banks.

CBEU has a long history of hard struggles (not mere roadshows) against injustices of the bank managements in instances of violations of principals and natural justice. A strike action at the Hongkong Shanghai Bank branch of the Union launched on 3rd August 1965 continued for one month and 18 days against a highly unprincipled policy introduced by the Bank making it a pre- condition to leave the union membership to become eligible for promotion to officer grades. A member of the Union by the name,  O.C.De Crestor was to be victimized under this. The management agreed to withdraw their condition.

Thereafter ,CBEU launched a general strike of the entire membership on 5th of July 1969, against an arbitrary denial of a promotion to two members overlooking their seniority above those promoted. This strike went on for 18 days until the Minister of Labour appointed the L.B.De Silva Commission to lay down the principles applicable to promotion procedures.

On 26th November 1976, CBEU went on an island wide one day General Strike along with several other progressive trade unions and Students Movements in protest against the brutal killing of a student at the Peradeniya University, named Weerasooriya. 

It is significant to note that the governing bodies of the Union has taken all these  decisions after a full consultation of the membership. At times Eg. During the Weerasooriya incident Union summoned a special emergency general membership meeting prior to the strike decision.

The State banks too have since of late adopted a laissez-faire attitude. Several revelations of abuse of power, corruption and questionable performance publicly highlighted have been callously disregarded. Good human resource management practices which include succession planning have been ignored. Favored promotions, recruitments to higher grades on contract basis with extremely high remunerations and perks have become the order in the operations. The Boards of Directors have come under heavy public and audit queries pointing and alleging incompetence. A Chairman of PB admitted this fault in front of the Parliamentary COPE inquiry. 

What does this lead to? There is an Act of Parliament governing certain relevant aspects. Section 32 of the PB Act states as follows;

32 (1) There shall be a General manager of the Bank who shall be the Bank’s chief executive officer and who shall conduct the business of the Bank under the general supervision and control of the Board.

(2)  The Board may delegate any of its powers or duties to any officer of the Bank and may revoke any such delegation either wholly or in part and either as to persons or purposes.  

Government is the sole share- holder of both State banks. Treasury is responsible for the Public Funds and the Minister of Finance under whose purview the banks come has the right to give directives from time to time with regard to the role to be  played by the banks in the implementation of government policy decisions involving their participation. The Treasury as the Golden Share holder has to intervene in the affairs of the banks in situations warranting such actions. Especially when the Boards and Chairmen have been found to be wanting and culpable, the treasury has to, in the Public interest imperatively exercise this right. This aspect has to be admitted by all concerned. Because that is where the crowning blow and the finishing touch should arrive from.

But there is a fishy and slippery element associated with the move taken by the Government in removing the two General Managers. One Minister of the Government went public to state that it was due to the failure of the banks to implement the recent decision of the Govt. to grant a moratorium to the defaulting borrowers. Some other quarters spelled out different reasoning attributing mala fides to the selection procedures of the GMs. Whatever the underlying factors are the government has a duty to explain in the public interest what exactly has transpired. If these appointments are covered and governed by valid service contracts a termination has to be in keeping with such provisions.

In the 1970s when the GM of BOC, Mr. Sirimanne and the only DGM of BOC at that time, Mr. Moheed were arbitrarily discontinued, while Mr.K.Shinya was the Chairman and Dr.N.M.Perera was the Minister of Finance, they went to Courts against the decision and restored their positions legally. They had valid contracts of employment which could not be terminated at the whims and fancies of politicians.   

There is one undeniable truth in this entire domain of activity. A serious lack of a conscious concern and control is apparent. Things have been allowed to move as if no body’s responsibility. This has led to a rotten state of affairs. Authorities and officials have had the audacity to state in public that they did not know what they were doing in instances where billions of public monies were involved. Contract  Employees have been granted unauthorized service extensions costing several millions to the State. Expensive vehicles have been purchased at huge costs few months before the due retirements dates just to be taken away as a departing  gift. Large loans have been approved which have gone into non performing shortly after, some without adequate securities, disregarding risk control stipulations, for which no one has been held responsible. 

Government should know, that sending GMs away in a hurry will not bring the cows home. They are far scattered as a herd. The whole thing looks like real madness, with no methods to it and continues to go astray beyond recoup.

“When we the workers, all demand; ‘what are we fighting for?’…..

Then, then we will end that stupid crime, that devil’s madness War.”  ~ Robert William, 1874  SERVICE

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Latest comments

  • 0

    What is the procedure in Sri Lanka, I think banks and financial institutes must be under the central bank and not under the ministry or ministry Secretary appointed by the Minister

    • 0

      JD, there is no procedure in srilanka under Rajapakshes.
      Believe or not, like or not, not Arjuna Mahendran, but Kabral Ajith under BP Mahinda should long be arrested and punished by hanging him on his balls. Now with all is clear that the losses claimed by BPs prior to 2015 are clearly multiple times, neverthless, bp Mahind to use Kabral as his condom supporter should be made clear to the very same punnakku eaters dominaters srilanka.

      This country would have become a paradise, without BP Rajakashes. TOday I heard a man who was branded then as RATHTHARAN HORA, a former domestic driver to a wealthy family in Panadura, later became Rajaakshe man and abused lanka with their politics, by name Rohitha Abeygunawardhana was praised by bringing a book. I dont think if people are knowledgable enough would buy his book. The kind of men should long be jailed for having looted the state during BP Mahinda s REGIME prior to 2015.
      I now believe, we the nation is doomed by the politics of Rajakshes. The day Rajakapshes would have been punished by god, the day – opening doors to a better srilanka. JVPrs should be more powerful in this country, they are not yet confident enough. UNP young blood should be powerful in this country. and all others should line up behind them marginalizing bps Rajaakshes that restarted looting this country.

      • 0

        Wow, hasn’t Mr. Rusiri become rather saintly nowadays? Ok, it is bad when the Gota govt makes political appointments to help with its election promises. But then, you guys campaigned for Gota. So what did you expect? Milk and honey? Or were you expecting some plum appointment which didn’t materialize?

        • 0

          Rusripala was a great leader. He was one of the Leaders in 1972 strikes organised by Bank Unions for salary demands. The strike ended after 108 days with total
          failure. That is the beginning of strikes in the country. When Dr NM Left the
          Cabinet Hon Felix Dias Bandaranaike honoured Rusripala by appointing him as the Chairman of Bank of Ceylon. UNP Government was elected in the next election, and Dr Perera was defeated. UNP Government listened to the grievances of Bank employees and restored whatever was taken away by SLFP Government., Minister of the time. Rusripala subesequenly went back to Peoples Bank to his permanent employment After retirement he was organiser for UNP in Mirigama and lost the elections. In recent times he has become a researcher and lecturer on Bond Scam of the UNP Government.

  • 0

    I am compelled to add a para as an addendum to my above article. While reconfirming all what I have stated I wish to add that according to information made available to me subsequently the choice of the successors newly appointed as replacement to the GMs of the two banks has been heavily influenced by certain quarters identified as Ex Union officials who are close to the Rajapakse Government.
    Hence the hasty removal has been complemented by a similar hasty replacement without paying much attention to the performance records of the prospective successors.
    Both placements in the BOC as well as the PB ,therefore is fully tainted with highly undeserving persons facing severe complaints about their duties in the realm of fit and proper parameters under the CBSL guidelines.
    Considering the impropriety of making adverse comments of a personal nature, while refraining, I wish to add that the Government and the Ministry should carefully assess the suitability of the appointees, acting or permanent, to these vulnerable high positions without any compromises.
    Audit queries, COPE reports, CBSL guidelines, outcome of lending operations under their control and finally the findings of the Presidential Commission report handed over to the former President and now available at the presidential secretariat revealing corrupt operations of Senior bank Officers would serve as good sources of information instead.
    Those recruited on contract should not replace the career bankers to this high post.

    • 2

      please elaborate us as to why you guys dont reveal much about the bond scam of Mahinda Rajakashe era, even if forensic reports revealed the size of bond scam in that era is multiple times more ?
      That Wijewardhana too behaves as if he was an outsider regarding the bond scam of Rajakshe why is that ?
      Rusiriplaa and Wijewardhanas were regularly invited by SIRASA TV in the coverage of BOND scam. Very same both men, did not utter much about the high losses claimed by Ballige putha Rajakshs why is that ?
      I think these two men were hired by SIRASA for their own motives.
      These men should be UNBIASED if they really love the public. I think these two should be out of their biased thoughts.

  • 2

    I heard, People bank, during the Yahapalanaya period, had given some loand which would certainly go as default. One well known politician from UVA or East, has taken a big loan and then he had forced the bank to keep that as collateral and had taken another such loan, If true, a humongous joke. Then BOC had dropped it’s profits by 50%, said by COPe. So must be true. . If those are true, and then, every govt changes managements to fit their personal needs I suppose, This has happened. That is why, those have to be under the central bank, Management should have some one from the central bank and then if things are fishy and when needed both central bank and the banks must answer a FAIR Parliamentary committee.
    These banks are connected to bond scams too. That may repercussions both on the management and the present Finance minister and incoming one

    • 0

      You are absolutely on the point

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