30. The following new Part is hereby inserted immediately after Part VII and shall have effect as Part VIIA of the principal enactment:
| 49B.
| | (1) Whereupon a report made by the Director of Bank Supervision, the Monetary Board is satisfied that any licensed commercial bank is unable to carry on banking business in Sri Lanka ; or is unable to meet the demands of its depositors and other persons who have had transactions with sue a licensed commercial bank (in this Part of this Act referred to as "the defaulting bank ") and that its continuance in business is likely to involve serious economic loss to, and to adversely affect, the monetary and banking system and the national economy, the Monetary Board may, notwithstanding the provisions of any other law to the contrary, by Order published in the Gazette, vest the business carried on by defaulting bank being a business which it is authorized to carry on by or under this Act or such part thereof as the Monetary Board may determine, in another licensed commercial bank (in this Part of this Act referred to as the "acquiring bank") which consents to sub vesting. | | |
| | (2) For the purpose of subsection (1), the "business carried on by a defaulting bank" includes-
| | | (a) all immovable and movable property owned by the defaulting bank on the day preceding to relevant date (including cash balances, reserve funds, investments and deposits) ; |
| (b) all rights, powers, privileges, authorities and interests arising in, or out of, any property, movable or immovable, owned by the defaulting bank on the day preceding the relevant date; |
| (c) all the liabilities of the defaulting bank and subsisting on the day preceding the relevant date; and |
| (d) all books, accounts and documents relating or appertaining, to such undertaking in Sri Lanka. |
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| 49C. No Order under section 49B shall be made by the Monetary Board unless-
| | (a) the Monetary Board is satisfied that the proposed acquiring bank, is capable of carrying on in a competent manner the business of the defaulting bank proposed to be vested, and of meeting liabilities of the defaulting bank to its depositors and creditors pertaining of relating to the business proposed to be vested; | | |
| | (b) the proposed acquiring bank agreed writing to comply with such terms and conditions as may be specified by the Monetary Board relating to the manner in which-
| | | (i) any existing assets of the defaulting bank pertaining or relating to the business proposed to be vested, are to be used and any existing liabilities of the defaulting bank pertaining or relating to the business proposed to be vested are to be met; |
| (ii) any payments due to sovereign Government from the defaulting bank are to be made. |
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| 49D. With effect from the date of publication of the Order under section 49B in the Gazette, (in this Part of this Act referred to as the "relevant date") vesting the business of the defaulting bank or part thereof in the acquiring bank-
| | (a) the acquiring bank shall have control and possession of the vested business of the defaulting bank, and become the transferee of the vested business of such defaulting bank; | | |
| | (b)the licence Issued under this Act to the defaulting bank to carry on ,his buss ness vested in the acquiring ban, shall be modified to the extent necessary to enable the defaulting bank to carry on such part of its business as has not been vested to the acquiring bank; | | |
| | (c) the acquiring bank shall comply wife such terms and conditions as are agreed to by such bank under paragraph (b) of section 49c and such other directions as the Monetary Board may give to such bank under this Act; and | | |
| | (d) the licence issued under this Act to the defaulting bank to carry on banking business, shall where both domestic and off-shore banking business of such bank are vested to the acquiring bank, be deemed to be cancelled. | | |
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| 49E. Notwithstanding anything to the contrary in this Act or any other written law, the liability of the acquiring bank to meet the demands of any foreign currency depositor of the defaulting bank, In case of the foreign currency deposits; of the defaulting bank not being made available to the acquiring bank, shall be only in respect of such depositors as agree to accept the terms and conditions of any scheme for the grant of relief to such depositors, as may be formulated by the Monetary Board, upon review of the business of the defaulting bank and only to the extent set out in such scheme: |
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| 49F.
| | (1) For the purpose of ascertaining the value of the vested business of the defaulting bank on the day immediately preceding the relevant date, the Director of Bank Supervision shall cause an audit of such vested business to be conducted by a qualified auditor appointed by him with the approval of the Monetary Board. | | |
| | (2) The auditor appointed under subsection (1) shall submit a report to the Director of Bank Supervision within three months from the date of his appointment and the Director of Bank Supervision shall forward such report to the Monetary Board and the Monetary Board shall consider the report and if necessary, require the Auditor to furnish any further information, or explanations as it may consider necessary. | | |
| | (3) the auditor appointed under subsection (1) shall examine the accounts of the defaulting bank and ascertain the correctness of the balance sheet and furnish a report stating-
| | | (a) whether he has or has not obtained all the information and explanations required by him; |
| (b) whether he has or has not obtained accounts referred to in the report are property drawn up so as to exhibit a true and fair view of the defaulting banks affairs; and |
| (c) the value of the assets and liabilities of the vested business. |
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| | (4) the Monetary Board after considering the report of the auditor, shall direct the acquiring bank to pay in such manner and within such time as it may specify the value of the vested business to the defaulting bank or its liquidators or successors, as the case may be. | | |
| | (5) The payment required to be made to the defaulting bank in pursuance of " direction under subsection (4) and all payments required to be made to the auditor appointed under subsection (1), shall be made by the acquiring bank in accordance with such terms and conditions as may be determined by the Monetary Board. | | |
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| 49G. With effect from the relevant date-
| | (a) all contracts, deeds, bonds, agreements, powers of attorney, grants of legal representation, and other instruments of whatever nature pertaining, or relating to the vested business of the defaulting bank and subsisting, or having effect on the day immediately preceding the relevant date, and to which the defaulting bank is a party or which are in favour of the defaulting bank, shall be deemed with effect from the relevant date to be contracts, deeds, bonds, agreements, powers of attorney grants of legal representation or other instruments entered into or granted, as the case may be by the acquiring bank; | | |
| | (b) all actions and proceeding of what ever nature instituted by or against the defaulting bank pertaining or relating to he vested business of the defaulting bank. and pending on the day immediately preceding the relevant date, shall be deemed with effect from the relevant date to be actions and proceedings instituted by or against the acquiring bank, and may be continued or prosecuted accordingly; | | |
| | (c) all such officers and servants of the defaulting bank as are connected with such part of the business the defaulting bank as was vested or All the officers and servants of the defaulting bank whether entirety of the business of tin bank is vested, as the case may be, on the day immediately preceding the relevant date, who are not offered employment with the acquiring bank, shall be entitled to the payment of compensation. | | |
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| 49H. Where any officer or servant of the defaulting bank is entitled to be paid compensation, the acquiring bank shall determine the amount of compensation that shall be paid in consultation with the Commissioner of Labour and such determination shall be deemed not to affect the right sub officer or servant may have under any other written law. |
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| 49J. Any person who contravenes or fails to comply with any provision of this part or term or condition imposed thereunder shall be guilty of an offence under thin Act. |
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| 49K. Nothing contained in the provisions of paragraph (c) of subsection (1) of section 12 shall apply in relation to the vesting of banking business" of a defaulting bank or part thereof to an acquiring bank. |
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| 49L. In this Part of this Act unless to contract otherwise requires- |
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Sri Lanka Consolidated Acts