The Case Study - Seylan Bank

Swift and Decisive Action27The significance of this landmark, first meeting was summed up by theCentral Bank Governor: “We have brought in the Bank of Ceylon together withleading professional personalities in the country to head the new Seylan board,and they are expected to perform their duties until that Bank becomes stable.”That same day, trading in Seylan Bank shares, which had been halted bysecurities authorities during the crisis, resumed on the Colombo Stock Exchangeand immediately showed a slight rise in value - an encouraging sign of restoredconfidence. (Significantly, a day earlier the Bank had announced the extensionof a five-year debenture issue, after the full subscription of the first tranche ofRs. 400 Mn. - further evidence of longer-term support from institutional investors.)Mr. Pasqual, Seylan Bank’s General Manager, stressed to the media thatthe Bank was functioning normally with the backing of the Bank of Ceylonand the Central Bank. Now the challenge was to win back those customerswho had withdrawn their savings. He also asserted that the Bank would have noinvolvement with Golden Key, other than to assist with Ceylinco’s anticipatedpartial divestiture of its shareholding in Seylan Bank in order to reimbursedepositors in the credit card company.Highlighting the Bank’s successful track record as a retail servicesinnovator, Mr. Pasqual emphasised that the recent crisis had originated fromone segment of its customer base. Local and overseas funding partners, whileinitially concerned, had for the most part been reassured that Seylan retained asolid foundation on which to move ahead and rebuild any lost business.The spirit of a new beginning was symbolically reinforced when theboard of directors joined Seylan Bank employees at a head office gathering towelcome in the New Year. After the traditional lighting of an oil lamp, the newExecutive Chairman expressed his confidence that the Bank would soon returnto strength. With the immediate crisis already showing signs of abating, it wastime to address some of the deeper management challenges and help SeylanBank reach even greater heights as a leader in the financial services industry.