Financial Times

Bank of Ceylon to raise deposit rates, hunts loan defaulters
Bank of Ceylon plans to raise its deposit interest rates soon in accordance with the monetary policy of the Central Bank, which recently jacked up benchmark interest rates.

BOC chairman Udayasiri Kariyawasam said the bank would also vigorously pursue court action to recover some Rs. 13.5 billion from big corporate and individual loan defaulters but give a grace period from January to March 2006 to allow them to repay their loans.

This would give such defaulters an opportunity take their names off the black list and restore their creditworthiness, he told a news conference. The bank plans to increase the number of credit card customers from next year and has tied up with Sampath Bank, an arrangement that is being extended to other banks.

It still has Rs 13.5 billion in bad loans as at September 2005 although its Non-Performing Assets have fallen to 7.2 percent compared to 10.8 percent the year before. Kariyawasam also ruled out the possibility that the Bank of Ceylon would be privatized.

The bank is also improving its information technology systems and has included IT in its core-banking solutions such as electronic payment gateways.
It now has 135 branches on its IT network and plans to link up the balance 170 branches in 2006.

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