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As enacted
Contents

Part II · Resolution Measures

30. Establishment of a bridge bank

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

(1)

Notwithstanding anything to the contrary in any other written law, where the Central Bank, having regard to the relevant circumstances, is of the opinion that the failure of a licensed bank subject to resolution under this Act can have systemic importance or impact, the Central Bank may decide to establish one or more institutions (in this Act referred to as “bridge bank”), subject to the terms and conditions specified in subsection (6) of section 31 and with the approval of the Minister, for the purpose of-

(a)

continuing operations of all or part of the critical functions and viable operations of such licensed bank; or

(b)

transferring shares, any one or more of the assets, liabilities, legal rights and obligations or other property instruments owned or issued by such licensed bank:

Provided however, the amount of liabilities transferred to a bridge bank shall not, in any manner, exceed the amount of the transferred assets and other resources provided by the

Deposit Insurance Scheme provided for in Part III of this

Act, or the Government, as the case may be.

(2)

The Central Bank shall publish the decision taken under subsection (1) in the Gazette and at least in three

Sinhala, Tamil and English daily newspapers circulating in

Sri Lanka, within five days from the date of establishment of the bridge bank.

(3)

The Central Bank shall issue a licence to the bridge bank to carry on the banking business in Sri Lanka subject to such terms and conditions as the Central Bank may consider necessary.

(4)

The Central Bank shall ensure that the bridge bank is established in an expeditious manner, and the period of such establishment shall not exceed two days from the decision of the Central Bank referred to in subsection (1).

(5)

The establishment of the bridge bank shall be based on primary constituent documents of the licensed bank subject to resolution, and the other relevant documents pertaining to its establishment shall be submitted to the relevant authorities within thirty days from the date of the establishment.

(6)

The operations of the bridge bank shall be commenced from the first working day following the date of issuance of licence under subsection (3).

Read on from s 31

Part III

Sri Lanka Deposit Insurance Scheme

Read on from Part III

Part IV

Financial Sector Crisis Management Committee

Read on from Part IV

Part V

Winding Up of Licensed Bank

Read on from Part V

Schedules