The eighth of September this year is the fifth death anniversary of Deshamanya Cyril Herath, former IGP, Defence Secretary and Chairman of National Savings Bank (NSB); as well as distinguished alumnus of the prestigious Peradeniya University. On this occasion, we believe we have a duty to the people of Sri Lanka, the present employees of NSB and the banking fraternity, to reveal certain important facts relating to his unique and monumental contribution to NSB. The first few years of Mr. Herath’s chairmanship of NSB were marked by turbulence, uncertainty and challenges in the banking and financial sectors.
The World Bank’s panacea for all these ills, among others, was privatization. In their report to the government in the late nineties, the World Bank made certain observations about NSB, which appeared to be unpalatable and below the belt. We at the NSB at the time felt hurt, embarrassed, insulted and thunderstruck by this report. For obvious reasons, we don’t want to quote it verbatim and will only paraphrase the two fundamental observations / recommendations they made. · There is no justification for continuing the operations of NSB.
· NSB branches should be sold by auction (they are the very words used) to private and foreign banks; the State-owned banks should not be allowed to bid. (Readers may not believe that such a recommendation was ever made but we can vouch for that.) These recommendations, curiously but not surprisingly, coincided with the withdrawal of the interest subsidy paid by the Treasury annually to NSB since its inception in 1972. Throughout the years, it was this annual Treasury subsidy that ensured the continued viability of the bank; and this concession had been granted to NSB by statute to enable it to effectively compete with other financial institutions. There appeared to be no doubt that its withdrawal without reasonable notice was a strategic move intended to be the death knell of NSB because the authorities may have believed that the bank could and would never survive without the subsidy.
They probably thought that when the bank crashed, this would pave the way for implementing their recommendations. For us at NSB, it was too much to stomach. Mr. Cyril Herath, the top management team and the Ceylon Bank Employees’ Union refused to agree with the World Bank views; they felt that they were prejudiced and influenced by ulterior motives. Deshamanya Cyril Herath who was the Chairman at the time considered the World Bank recommendation as totally unwarranted, ill-timed and unjustified. He firmly decided that we should not cave in. He and the Management resolved with consummate determination to prove that the World Bank was wrong and that a government institution could be run efficiently and profitably without any subsidy provided there was good leadership and efficient management. While we at the NSB were fortunate to have Mr. Herath as our Chairman at that particular time, we dare say that if not for his strong, effective, rare and benevolent leadership,
NSB would have succumbed to the salvo fired by the World Bank; because of his unique leadership, we managed to weather the storm. Mr. Herath succeeded in rallying the Staff, inspiring and galvanizing them into action to meet this life and death challenge. The bank’s trade unions supported him to the hilt because they felt that he was the only saviour and the right man for the moment. No other Chairman or CEO in the history of this country would have received such support from trade unions; the employees felt that he was sincere, genuine and that he had the strength to fight back. They knew that he was the man who resigned as IGP five years prematurely when former President JR Jayewardene wanted him to grant an irregular and unethical promotion. So they had absolute confidence in him.
NSB employees all over Sri Lanka at the time would recall how Mr. Herath and the top management team visited the Staff in the branches during weekends. On these visits, he addressed them with a view to inspiring and motivating them to meet these challenges and to help realize the bank’s shared vision of achieving excellent bank status by the year 2002. (NSB realized the vision in the targeted year.) After these meetings,
Mr. Herath and his team mixed with the staff in a spirit of camaraderie. The transformation of NSB against all odds (by this time the attractive tax concessions the NSB depositors had hitherto enjoyed also had been withdrawn) was incredible and it became an efficient, well-managed, profitable and customer-oriented bank offering innovative products.
It is ingratitude if people, particularly the employees and Board members, forget the unique contribution Mr. Herath made to NSB. On a personal note, we think that we were very fortunate, privileged and blessed to have worked under an exemplary leader of the calibre of Mr. Herath. His beloved wife, Mrs. Rani Herath who passed away within one year of his death, was a gracious and virtuous lady who made it possible for Mr. Herath to fully concentrate on coping with the challenges of his job. Beloved Sir, on behalf of all the employees of NSB, past and present, we wish you and Mrs. Herath peace and serenity in your sojourn in samsara. Esbe Balalle and Eastman Narangoda Former General Managers of NSB