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By Chandani Jayatilleke

Having received the best education at Trinity College, Kandy and Royal College, Colombo, Kapila Jayawardena began a banking career with one of Sri Lanka's leading foreign banks - Citibank way back in 1980. Today after 22 years of service, Jayawardena has risen to its helm from a junior banker - the Citibank being the second largest banking group in the world, his achievement is simply remarkable.

As Citibank made headway in the banking arena in Sri Lanka, he achieved success in his professional career. Jayawardena who is the Chairman of the Sri Lanka Banks Association, is also a member of the think-tank team that was appointed by Prime Minister Ranil Wickremesinghe to advise him on financial reforms which are being currently implemented.

Today, as Citibank's CEO and its Country Head, Jayawardena looks forward to taking the bank to greater heights while contributing its share to the growth of the country's economy in the years ahead. Joining this week's Meeting Point, Jayawardena said: "Citibank is here to stay. The Group is prepared to invest in the country as and when the need arises." In this interview, he shares his views on Citibank's future role, the banking industry and the economy in Sri Lanka.

"We are very optimistic about the way the economy is recovering and the peace process is progressing. When I took over as CEO in 1998, the bank was at the crossroads. We had a situation where the bank's finances were stable and it was a sleeping giant. After 1998, we focussed on the aggressive business with much help from our regional office and the head office which was ready to invest more in Sri Lanka.

In this context, Citibank is the fastest growing bank in the country. The success, he attributed to people - knowledge and globality.

"People: We have one of the best banking team whom we look after and train to deliver the best services to the customers. According to an employee satisfaction survey conducted by the Group last year, the Colombo bank scored 86%, to be ahead of many other regional banks. Knowledge: Having a good knowledge about our customers is an asset. Unless we understood the banking culture in the country properly, we cannot gauge where our services should be focussed on. Globality: This is where our real strength lies. As a global bank, we have a presence in over 100 countries. In Sri Lanka, we take the maximum advantage of this globility. Being a global bank it has given us much strength and scope to successfully transfer and transact business among countries."

Customer focus

The Citibank's customer focus is generally towards the Corporate Sector. "But, this year we are looking at new areas such as middle market and acquiring private banking areas. The bank also has much potential in furthering business in areas such as foreign exchange and money markets. As debt markets are becoming more liquid and deregulation is taking place in the capital market, there is much potential in these areas for future growth. We are strong in the area of loan syndication business. If the Government is looking for borrowing money overseas, we will be in a position to arrange such loan syndication. We have the advantage in doing so, because Solomon Smith Barney, a major investment bank is part of our group.

Privatisation

The Government has a fairly ambitious privatisation program at present. Citibank being a global bank has the strength to contribute to the success of such a program in many ways. We can introduce potential investors to Sri Lanka and also assist PERC or the Government to structure some of these privatisation projects. At present, we are in the process of talking to the Government on several privatisation projects.

Banking services

Many banks in Sri Lanka are delivering better services than banks in other developing countries. The local banks here compete pretty well with foreign banks and as a foreign bank we are competing with them. Customer services have evolved and services such as ATMs were introduced fairly early in Sri Lanka. Though banks offer many good services, they should focus on earning customer confidence as well. "If you have that confidence, they will not leave the bank even in a crisis situation.

Banking in the future

Banks need to be realistic to face future challenges and banks should be prepared to accept mergers and acquisitions. At present the country has too many banks - some banks are under capitalised and what role small and undercapitalised banks could play in a developing economy is a question. Therefore, acquisition and mergers should be encouraged by calling upon the banks to adhere to a minimum requirement of capital of Rs. 500 million plus US$ 2 million, if the bank is engaged in foreign currency activities. This will encourage banks to grow steadily, resulting a small, healthy banking industry in the country.

Any bank management should know what their financial strengths are, before deciding to go into expensive, new building projects and computer networks. They need to think of keeping the profitability intact.

Financial reforms

Being a key person in the financial reforms sector, Jayawardena advocates that the banking act has to reviewed, taking into account some of the latest developments in the industry.

"The Central Bank should pay an interest rate on the Statutory Reserve Ratio (SRR) maintained by banks to encourage banks to reduce interest on lending and increase interest on deposits.

It should be made compulsory for all financial institutions (which takes deposits) to get credit ratings and prominently publicise them among people so that the customers can intelligently decide with whom they should invest or save in the future.

Establishing a long term yield is also necessary. At present Central Bank has one-year treasury bills and two to three-year treasury bonds. This should be expanded to five years.

Banks should also be asked to increase the capital to Rs. 7 billion in seven years."

The entry requirement at present is Rs. 500 million. But it is not sufficient. Asked how foreign banks would respond to this proposal, Jayawardena said: the foreign banks will have to retain their earnings without remitting overseas. For Citibank, it won't be an issue. If we don't have enough funds we will bring in more money."

Personal life

A son of a Civil Servant, Jayawardena was always fascinated with accountancy. When he left school, he continued his studies in accountancy with the intention of making a top career which combines banking and accountancy. Banking is a preferred career among many young people. It's a stable and recognised position. Jayawardena was no exceptional.

What made Jayawardena's banking dreams come true was the Citibank. "It offered me an employment opportunity and over the last 22 years, my career with Citibank has grown from strength to strength. I have learnt all aspects of banking operations while completing an MBA degree during my stay with the bank," he concluded with much satisfaction. 

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