Preference to staff, customers when listing banks on CSE

Senior Advisor to the Finance Ministry Mano Tittawella on Friday revealed that when listing small stake of state banks on the Colombo Stock Exchange, preference will be given to employees and customers. 

He made this observation at the E&Y (Ernst and Young) Budget Forum when asked for more clarity over the 2018 Budget proposal. 

The Finance Minister’s 2018 Budget proposed that Bank of Ceylon and Peoples’ Bank be allowed to raise capital via the equity market (Government will continue to maintain its controlling stake), provided depositors and employers also have the option to become shareholders.

It was also stated that the Government would infuse Rs. 5 billion as equity to BOC in 2017 and a further Rs. 5 billion in 2018. There will be an additional infusion of Rs. 2.5 billion as capital into the Pradeshiya Sanwardana Bank in 2017.

“The Government will not put any more money on state banks,” said Tittawella. “Banks can raise capital by divesting minority stakes on the CSE with preference given to staff and customers. They can become true stakeholders. Banks depend on customers after all and the two state banks have over nine million customers. So it will be an ideal opportunity for them to become shareholders and also employees to partner. This will also deepen the stock market,” Tittawella added.