Banks should contribute to Sri Lanka’s development
The People’s Bank has played a pivotal role in building the country’s agricultural and the small and medium enterprises sectors since it was formed 1961, said the Minister of Public Enterprises Development Kabir Hashim unveiling the new People’s Bank logo by switching a computer at a ceremony held at the Hilton Hotel Colombo by last week.
The minister said that while banks can be a strength they could also become an obstacle to the growth of the country. Referring to the collapse of the world’s financial sector in 2008, the minister said that several banks in Iceland and financial institutions in the US went bankrupt and then collapsed.
He said the People’s Bank and the Bank of Ceylon in the 60′s helped build the nation and in 1977 with the formation of the National Development Bank, the Janasaviya Trust Fund with micro finance supported the small and medium enterprises (SME) sectors which was a hallmark in the banking sector of the country. “Sri Lanka has a stable banking sector but there are too many banks for a small country like ours with 24 licensed commercial banks and 58 non-bank financial institutions. Licensed and commercial banks hold 58 per cent of the total assets of the financial system. The Bank of Ceylon and the People’s Bank hold 35 per cent of the total banking assets of the country.”
He said he does not have an answer whether banks in Sri Lanka in recent times have played a role developing the country’s economy. “In my opinion it is not enough.” he added.
He said the sixth largest domestic banks here made a profit of Rs. 108 billion in 2014 while pawning profits rose by 60 per cent. He said as mentioned in the recent budget proposals banks should lend a helping hand to the agricultural and the SME sectors.
The minister wound up his speech humorously by reciting a quotation in which a banker lends an umbrella to a client during sunshine and withdraws it during rain.
Bank Chairman Hemasiri Fernando said since the formation of the People’s Bank in 1961 it had lived up to its expectation in adopting and developing strategies to suit the needs of its customers. He said in 1961 the banking sector in Sri Lanka was revolutionized with the formation of the People’s Bank. He said the bank will endeavour in future to incorporate modern technology to serve its customers.