Amendments to Banking Act Determination No. 01 of 2019 on Fitness and Propriety Assessments for Bank Executives

28 June2024
CENTRAT BAI\K OF SRI LAI\KA
BANKING ACT DETERMINATION No.02 of2024
AMENDMENTS TO THE BANKING ACT DETERMINATION NO. 01 OF 2019 ON ASSESSMENT OF FITNESS AND PROPRIETY OF CHIEF EXECUTIVE OFFIC ER AI\D O FFIC ER"-,HilHil:::' "UT IVE FUN C TI ONS IN Banking Act Determination No. 01 of 2AI9 dated 19.12.2019 on Assessment of Fitness and Propriety of Chief Executive Officer and Officers Performing Executive Functions in Licensed Banks is hereby amended by replacing the Determinations 3.1 and 3.3 as given below.
3. Information
to be furnished and deadline for submission
3.1 The person proposed to be appointed or nominated as Chief
Executive Officer (CEO) or Officer Performing Executive Functions of a licensed bank shall submit the original Affidavit as given in Schedule I hereto, for the assessment of fitness and propriety, before such person is appointed or nominated to the designated post of a licensed bank.
3.3 The Company Secretary shall complete Schedule II hereto.
The Chairman and CEO shall complete Schedule III hereto, with respect to CEO and Officers Performing Executive Functions of a licensed bank, respectively, and forward the Affidavit, Schedule II and Schedule III. Mrs.KMANDaulagala Chief Executive Officer/ Senior Deputy Governor of the Central Bank of Sri Lanka

Schedule I
Affidavit to be submitted by Chief Executive Officer and Officers Performing Executive Functions proposed to be appointed/nominated in Licensed Commercial Banks and Licensed Specialised Banks (hereinafter referred to as licensed banks) in terms of sections 42(2), 44A and 76H of the Banking Act No. 30 of 1988 (as amended) AFFIDAVIT I ….……………………………………………………………………………… (full name), holder of National Identity Card No.1 ……….…………………… and Passport No. …………………….………of…….……………………………………….…………… (address), being a [Buddhist / Hindu/ Muslim/ Christian / Catholic/other……….... (please specify)] do hereby [solemnly, sincerely and truly declare and make oath/ affirm (please specify as appropriate)] as follows:
1 I am the [affirmant / deponent] above named.
2 I state that I have been proposed to be appointed/nominated as the …………...…………………………………... (designation) of …………………………………….… (name of bank) which is a licensed commercial bank/licensed specialised bank under the Banking Act No. 30 of 1988, (as amended). 3 I state that I possess the following academic and/or professional qualification/s in Banking, Finance, Economics, Accounting, Business Administration, Information Technology, Risk Management, Law or any other relevant discipline as may be determined by the Central Bank of Sri Lanka according to the mandate/business model of the bank. Qualifications Relevant Discipline Country Name of the Institution Year of Completion Academic (i) (ii) 1 Not applicable for expatriates.

Professional
(i)
(ii)
4 I state that I possess the following effective experience in Banking, Finance, Economics, Accounting, Business Administration, Information Technology, Risk Management, Law or any other relevant discipline as may be determined by the Central Bank of Sri Lanka, according to the mandate/business model of the bank. Descript ion Name of the Institution/ Own Business Designati on /Position Nature of Appointment * Work Speciali zation Date of Appointment (dd/mm/ yyyy) Service Period (dd/mm/ yyyy to dd/mm/y yyy) Current Positions Directorships Other Positions Previous Positions Directorships Other Positions

• New Appointment/ Promotion/ Contract Basis/ Renewal of Contract/ Lateral Move/ Other (Please
  Specify)
  5 I state that there is a finding/no finding by any regulatory or supervisory authority, professional association, any Commission of Inquiry, tribunal or other body established by law in Sri Lanka or outside Sri Lanka, to the effect that I have committed or have been connected with the commission of any act which involves fraud, deceit, dishonesty or any other improper conduct. 6 I state that I am subject/not subject to any proceedings, inquiry or investigation consequent upon being served with notice of a charge involving fraud, deceit, dishonesty or other similar criminal activity, by any court, tribunal, regulatory authority, supervisory authority, professional association, commission of inquiry, or any other body established by law, in Sri Lanka or outside Sri Lanka.

7 I state that I have been convicted /not been convicted by any court in Sri Lanka or outside Sri Lanka, in respect of a crime committed in connection with financial management or of any offence involving moral turpitude. 8 I state that I am/am not an undischarged insolvent or have been/not been declared a bankrupt in Sri Lanka or outside Sri Lanka. 9 I state that I have failed/not failed to satisfy any judgment or order of any court whether in Sri Lanka or outside Sri Lanka, to repay a debt2 . 10 I state that I have been/not been declared by a court of competent jurisdiction in Sri Lanka or outside Sri Lanka, to be of unsound mind. 11 I state that I have been/ not been removed or suspended by an order of a regulatory or supervisory authority, from serving as a Director/Chief Executive Officer/Officer Performing Executive Functions or any other officer in a licensed bank or any other financial institution or corporate body, in Sri Lanka or outside Sri Lanka. 12 I state that I have been/not been a Director, Chief Executive Officer or have held/not held any other position of authority in any bank or financial institution – (i) whose licence has been suspended or cancelled; or (ii) which has been wound up or is being wound up, or which is being compulsorily liquidated; whether in Sri Lanka or outside Sri Lanka. 13 I state that to the best of my knowledge I am a fit and proper person to be appointed/nominated as the …………....……………………………………. (designation) of a licensed commercial bank/licensed specialised bank in terms of the provisions of the Banking Act, No. 30 of 1988 (as amended). 14 I state that I am not prevented by any written law from being appointed to the above post. 15 I state that the information given in Annex I is to the best of my knowledge and belief, true and complete. 2 Please refer 3(iii) of the “Guidance to Duly Complete the Affidavit and Declaration”.

The averments contained herein were read over to the [affirmant/deponent] who having accepted same as true, affirmed/swore to and placed his/her signature at ………. on this ……… day of ……… (Month, Year) Before me JUSTICE OF THE PEACE / COMMISSIONER FOR OATHS Affix stamps as applicable

Annex I
Declaration to be submitted by Chief Executive Officer and Officers Performing Executive Functions of Licensed Banks DECLARATION Name of the Bank:
Personal Information, Qualifications and Business Transactions

1. Personal Details
   1.1 (i) Name with Initials:
   (ii) Title: Mr/Mrs/Ms/Dr/Prof/Other (Please specify) (iii) Age as at date of signing the affidavit: (dd/mm/yyyy) (iv) Date of Birth: (dd/mm/yyyy) (v) Sex:
   (vi) Civil Status: (vii) Nationality: (viii) Citizenship3 :
   (ix) Local/expatriate:
   1.2 Contact
   Details
   Permanent Address:
   Residential Address:
   (i) Telephone Mobile
   Fixed line
   Fax
   (ii) E- mail Personal
   Official
   1.3 (i) Proposed Post/Designation in the bank: (ii) Proposed date of appointment to the
   Post/Designation (dd/mm/yyyy)
   1.4 (i) Details of Appointment of Chief Executive Officer/Officers Performing Executive Functions
   New
   Appointment
   Contract Basis Lateral
   Move
   3 A Dual Citizen is required to state whether he/she should be considered as local or expatriate. Passport Size Photo (Taken within last 6 months)

Promotion Renewal of
Contract
Other
(Please specify)
1.5 1.5.1 Details of close relations in terms of Section 86 of the Banking Act, No. 30 of 1988 (as
amended)
(i) Full name of the Spouse:
(ii) NIC No: (iii) Passport No:
1.5.2 Details of dependent children
(i) Full Name (ii) NIC No: (iii) Passport No:
2. Additional qualifications, in addition to the above information:
Special Assignments /
Consultancy/Advisory/Audit
Services
Name of the
Institution
Description Service Period
(dd/mm/yyyy to dd/mm/yyyy)
(i)
(ii)
3. Details of direct all and/or indirect share ownership in entities, presently held.
Name of the
Institution/s
Voting/Non￾voting
No. of Shares For Indirect
Holdings, Name of the
Institution of
Direct Holding
Percentage
Holding
Direct Indirect Direct Indi rect
4. Business Transactions
4.1 I state that I have/do not have deposits with the licensed bank, its subsidiaries4
or associate companies5
(If yes, please state name/s of the institution/s).
4.2 I state that I currently have (had) the following business transactions during the two years
immediately preceding the appointment, with the licensed bank, its subsidiaries, associate ‘Subsidiary’ as defined in Section 17(3) of the Banking Act No.30 of 1988 (as amended). ‘Associate’ as defined in Section 46(1) of the Banking Act No.30 of 1988 (as amended).

companies and affiliated companies/entities, and other related parties6 of the licensed bank. Name of the Institution/s Date of Transacti on (dd/mm/y yyy) Amount as at dd/mm/yyyy (Rs. mn) Classification (Performing/ Non￾performing) Type and Value of Collate ral (Rs.mn) % of Bank’s Regulatory Capital/ Relevant Entity’s Capital Limit Outstandi ng Borrowings7 Investments8
4.3 I state that I am the Guarantor for the following business transactions.
Type of
Transaction
Name of the
Institution/s
Date of Transaction
(dd/mm/yyyy)
Amount as at dd/mm/yyyy (Rs.mn)
5. Appointments, Shareholdings and Business Transactions of Close Relations
5.1 I state that my close relations9
are presently employed as directors, chief executive officers, or officers performing executive functions of the following licensed banks, their subsidiaries, associate companies, affiliated companies/entities, and other related parties of the licensed bank, and other financial institutions as defined in the Central Bank of Sri Lanka Act No.16 of 2023. Name of the Close Relation Name of the Institution Position
5.2 I state the following details of all direct and/or indirect share ownerships in entities,
presently held by my close relations.
‘Related Parties’ as defined in the Banking Act Directions No, 11 of 2007 and 12 of 2007 on Corporate Governance of Licensed Banks in Sri Lanka (as amended). 7 Shall include on-balance sheet and off-balance sheet borrowings. 8 Shall include debt instruments. 9 Close Relations as defined in the Section 86 of the Banking Act No.30 of 1988 (as amended).

Name of the
Institution/s
Voting/Non￾voting
No. of Shares For Indirect Holdings,
Name of the Institution of Direct Holding
Percentage
Holding
Direct Indirect Direct Indi rect
5.3 I state that my close relations currently have (had) the following business during the two
years immediately preceding the appointment, with the licensed bank, its subsidiaries, associate companies affiliated companies/entities, and other related parties of the licensed bank. Name of the Close Relation Name of the Institution Date of Transaction (dd/mm/yy) Amount as at dd/mm/yyyy (Rs.mn) Type and Value of Collateral (Rs mn) % of Bank’s Regulat ory Capital Limit Outstanding Borrowings8 Investments9
6. Other Information
6.1 I state that I am subject to /not subject to supervision or regulation of regulatory
authority/ies, supervisory authority/ies established outside Sri Lanka (if the answer is given in the affirmative, please specify the regulatory/supervisory Authority).
6.2 I state that the following information of the inquiries/investigations to which I have been
subject to, conducted by the regulatory authority, supervisory authority, professional association, commission of inquiry, financial institution as defined in the Central Bank of Sri Lanka Act No.16 of 2023, or any other body established by law in Sri Lanka or outside Sri Lanka, if any:
Year Name of the Institution Subject Matter Current Status
7. Any other explanation/information in regard to the information furnished above and other
information considered relevant for assessing the suitability of the proposed person.

DECLARATION:
I state that I am aware of the provisions of the Banking Act No.30 of 1988 (as amended) and Direction and Determination issued thereunder, on assessment of fitness and propriety of my position and confirm that the above information is to the best of my knowledge and belief true and complete. I undertake to keep the licensed bank fully informed, as soon as possible, of all subsequent events, which are relevant to the information provided above. Date: ____________ ______________________________ Signature of the Chief Executive Officer/Officer Performing Executive Functions of the Licensed Bank

Guidance to Duly Complete the Affidavit and Declaration to be submitted by the Chief Executive Officers (CEOs) and Officers Performing Executive Functions of Licensed Banks This guidance is issued to ensure that sufficient and accurate information is provided by banks for assessing the fitness and propriety of CEOs and Officers Performing Executive Functions prior to their appointments to the respective positions.

1. Purpose of Obtaining the Affidavit and Declaration
   (i) The purpose of obtaining affidavits and declarations of CEOs and Officers Performing Executive Functions of Licensed Banks is to enable the Bank Supervision Department of the Central Bank of Sri Lanka to assess their fitness and propriety of such officers to hold the respective position in terms of the provisions of the Banking Act No.30 of 1988 (as amended). (ii) Accordingly, the Bank Supervision Department requires comprehensive information to evaluate the qualifications, experience, integrity and compliance with the requirements specified in the Banking Act, to assess the suitability of CEOs, and Officers Performing Executive Functions prior to appointment of such person to the respective positions of respective bank. (iii) The Affidavit and Declaration submitted by the persons proposed to be appointed/nominated shall be the legally binding document in the event of any dispute/controversy.
2. Affidavit
   (i) It is preferable that the Affidavit is prepared as a fresh document, based on the format provided by the Bank Supervision Department, so as to avoid inclusion of unnecessary words. However, if the given format is filled, all alterations, erasures and interlineations should be initialed by the Commissioner for Oaths/Justice of the Peace immediately after all such amendments. (ii) All blank spaces should be completed appropriately. (iii) Appropriate words should be used based on the religion of the officer. If the officer refrains/objects to disclose his/her religion, a confirmation should be submitted by the officer stating that:

• He/she is an atheist or belongs to a religion not mentioned in this Affidavit; or
• He/she objects to disclosing his/her religion.

(iv) Strike-out the irrelevant word(s). If the irrelevant words are stricken out, the Commissioner for Oaths/Justice of the Peace should place his initials immediately after all such amendments. If the answer is given in the affirmative, provide relevant information. (v) If the person is a foreigner and signs the Affidavit while overseas:

• Signature of the person should be attested by a Commissioner for Oaths or an
  equivalent in the country in which he places his signature.
• Attestation should be made in front of the diplomatic, consular officer of Sri
  Lanka in the country where the Officer resides or in terms of the laws applicable in such country. (vi) Affix a stamp for the value applicable as at the date of signing the Affidavit, if applicable. (vii) If the affidavit is executed in Sri Lanka, the same shall be attested by a Commissioner for Oaths/Justice of the Peace immediately after placing the signature of the person at ‘Before me.’ (viii) CEOs and Officers Performing Executive Functions shall submit Terms of appointment (including designation, date of appointment, duties, responsibilities and remuneration package).

3. Declaration
   (i) All sections of the Declarations should be:

• duly completed and irrelevant sections, if any, should be stated as Not
  Applicable/Nil/None.
• signed and dated.
  (ii) If there is no comment it should be state as Not Applicable/Nil/None. (iii) Officers Performing Executive Functions shall request the Credit Information Bureau of Sri Lanka to send their credit report directly to the Director of Bank Supervision via email to dbsd@cbsl.lk.

Schedule II
To be filled by the Company Secretary

1. Corporate Information
   Recommendation of the Nomination Committee/Appointing Authority Name of the Licensed Bank Full Name of the person proposed to be appointed/ nominated as CEO or Officer Performing Executive Functions Assessment Criteria (Please specify the specific knowledge/skills considered by the Nomination Committee and the Appointing Authority) Recommendation (Please attach minutes of the resolution/decision of the Nomination Committee and the Appointing Authority)
2. Remarks of the Board of Directors
   (1) Any other explanation / information regarding the details furnished above. (2) Submitted to the Board of Directors of the Bank /Approval has been granted by the Board of Directors for above proposed appointment or nomination at the meeting dated…………(dd/mm/yyyy)
3. I state that the affidavit has been completed in terms of Sections 42, 44A (with respect to
   licensed commercial banks), and 76H (with respect to licensed specialised banks) of the Banking Act, No. 30 of 1988 (as amended) and the Directions and Determinations, issued thereunder. Name:
   Signature of the Company Secretary and the Official Stamp:
   Date:

Schedule III
For Chief Executive Officer (Local Licensed banks) - To be filled by the Chairperson For Chief Executive Officer/Country Head (Branch of Foreign Banks) - To be filled by the Regional Head For Officers Performing Executive Functions - To be filled by the Chief Executive Officer Declaration:
(1) Any other explanation / information regarding the details furnished above and other information considered relevant for assessing the suitability of the Chief Executive Officer/Officer Performing Executive Functions of the licensed bank. (2) I confirm that, in terms of Section 44A/ Section 76H read with Section 44A of the Banking Act, No. 30 of 1988, the officer referred to above is fit and proper to be appointed as the Chief Executive Officer/an Officer Performing Executive Functions of …………………………… (Name of Bank) Date: Signature of the Chairperson / Regional Head / Chief Executive Officer and the official stamp