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As enacted
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Contents

Part II · Resolution Measures

32. Term of a bridge bank

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

(1)

Subject to the provisions of subsections (3) and (4), the term of the bridge bank shall not exceed a period of two years from the last date of transfer of shares, assets and liabilities and instruments of ownership of the licensed bank subject to resolution.

(2)

The Central Bank shall terminate the bridge bank as soon as practicable, according to its own assessment, having regard to the objectives of resolution, completion of the tasks assigned to the bridge bank and such other matters on its merit, upon the completion of the period of two years referred to in subsection (1).

(3)

Subject to the provisions of subsection (4), where the

Central Bank is satisfied that the bridge bank no longer serves the objectives of resolution, the Central Bank may, after informing the Minister-

(a)

merge the bridge bank with another entity;

(b)

sell in whole or part, the assets, rights, and obligations of the bridge bank to a third party; or

(c)

liquidate the assets of the bridge bank and pay its obligations in full.

(4)

The term of the bridge bank may be extended by the

Central Bank for a further period of one year at a time:

Provided however, the term of a bridge bank shall not, in the aggregate, exceed five years.

(5)

(a)

All the decisions of the Central Bank under subsections (2), (3) and (4) shall be based on an assessment of the circumstances and market conditions that justify such decisions.

(b)

The Central Bank shall submit a report to the Minister within one month from the date of such decisions. In the case of an extension granted under subsection (4), the Central

Bank shall also publish a reasoned explanation as to why such an extension is necessary.

(6)

Where the term of the bridge bank is terminated under subsection (2), the Central Bank shall-

(a)

cancel the licence issued to such bridge bank; and

(b)

wind up such bridge bank under Part V of this Act.

(7)

Subject to the provisions of subsection (3) of section 51, all receipts resulting from the cessation of the operation of the bridge bank under this section shall be transferred to the Government.

Read on from s 33

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