24. Amendment of section 42 of the principal enactment

Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.

Section 42 of the principal enactment is hereby amended as follows: -

(1)

in subsection (2) thereof, -

(a)

by the repeal of paragraph (a) and the substitution therefor of the following: -

“(a) that such person possesses academic or professional qualifications and effective experience in banking, finance, economics, accounting, business administration, information technology, risk management, law or any other relevant discipline as may be determined by the Central Bank;”;

(b)

by the repeal of paragraph (c) and the substitution therefor of the following: -

“(c) that such person is not subject to any proceedings, inquiry or investigation consequent upon being served with notice of a charge involving fraud, deceit, dishonesty or other similar criminal activity, by any court, tribunal, regulatory authority, supervisory authority, professional association,

Commission of Inquiry, or any other body established by law, in Sri Lanka or outside Sri Lanka.”;

(2)

by the repeal of subsection (4) thereof, and the substitution therefor of the following: -

“(4) Every licensed commercial bank shall notify the Director of Bank Supervision in such form as may be determined by the Director of Bank

Supervision, the name, address and occupation and if he considers necessary, any further information of -

(a)

each person proposed to be appointed, elected or nominated as a director of such licensed commercial bank, before such appointment, election or nomination, as the case may be;

(b)

any director of such licensed commercial bank, if such bank is aware that such person is not a fit and proper person or where such director becomes otherwise ineligible to hold office as such director, within fifteen days of such bank becoming aware of such facts.”;

(3)

by the insertion, immediately after subsection (4)

thereof, of the following: -

“(4A) The Director of Bank Supervision may, upon receipt of notice under subsection (4), if he considers necessary, cause further investigation to satisfy himself in relation to any of the matters referred to in subsection (1) or (2).”;

(4)

by the repeal of subsection (7) thereof, and the substitution therefor of the following:-

“(7) A licensed commercial bank shall not appoint, elect or nominate as a director of the licensed commercial bank, a person whose appointment, election or nomination, as the case may be, has not been approved under subsection (5) or subsection (6) and no such director shall be permitted to carry out any duty or function of such licensed commercial bank in any capacity.”;

(5)

by the repeal of subsection (12) thereof, and the substitution therefor of the following:-

“(12) The Board of Directors of a licensed commercial bank shall have the duty to oversee the management of the affairs of the licensed commercial bank including its governance framework and be ultimately responsible for ensuring that the business of such bank is carried out in compliance with all applicable laws and consistent with safe and sound banking practices.”;

and

(6)

by the addition immediately after subsection (12)

thereof, of the following:-

“(13) Notwithstanding anything to the contrary in any other written law, the Central Bank shall, from time to time, determine the number of members of the Board of Directors of a licensed commercial bank which number shall not be less than seven in any case.”.

Read on from s 25