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SLIC To Secure Seylan Bank

SLIC is expected to take up the bulk of risk capital in bailing out Seylan Bank

Sri Lanka Insurance Corporation (SLIC) is expected to take up the bulk of risk capital in bailing out Seylan Bank, while state-run Bank of Ceylon and National Savings Bank (NSB) may take smaller stakes – reported Lanka Business.

SLIC was recently returned to state ownership and management following a court order, and a board was approved by courts last Friday. Sri Lanka Insurance will take up the most number of shares, while Bank of Ceylon and NSB will take up the rest.

Seylan was quickly put under the guidance of Bank of Ceylon by the Central Bank following a run on Seylan’s deposits, when an unregulated firm in its controlling Ceylinco group buckled last year.

Both NSB and Bank of Ceylon are fully-owned by the state. They have been bailed out by the government to make up for losses on bad loans and employee pension fund shortfalls in the past.