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July 24, 2007 (LBO) – Sri Lanka's bank regulators have shot down an attempt to appoint a common directorate to two state banks which had their origins in election promises, but are now trying to consolidate to conserve capital, officials said. Vimasuma.com Newsdesk The government is planning to amalgamate a state bank created to give effect to election promises made in 2005 with SME Bank, another bank created to give effect to an election promise made in 2004.

SME Bank's board was replaced by that of Lankaputhra Bank earlier this month ahead of a proposed take-over by Lankaputhra.

SME Bank's general manager Douglas Weerasinge told the Vimasuma.com website that the Central Bank which regulates Sri Lanka's banks has rejected the board as it was against Sri Lanka's banking law.

The new SME Bank directorate was made up of Shiromi Wickremesinghe (CEO of Lankaputhra), Kosala Wickremanayake, S S C de Silva, Palane Amarasinghe, and treasury representatives.

Lankaputhra Bank chairman A de Vass Gunewardene was also appointed the chairman of SME Bank.

Officials say the government is now looking for fresh candidates including a chairman.

Under Sri Lanka's banking law directors of one bank cannot serve on the board of