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By Ravi Ladduwahetty

The Bank of Ceylon's (BoC) new Chairperson Sumi Munasinghe yesterday expressed confidence that she will be able to lead Sri Lanka's premier bank to retain the market leader's position even in a deregulated environment.

"We must look at the root causes which had led to the Government having to privatise state owned enterprises. It is because they have been losing profitability, thus resulting in the erosion of capital. The Government has no funds to infuse fresh capital into them either. However, the Bank of Ceylon does not have these problems. It is not losing money, and the Capital Adequacy Ratio is much more than the Central Bank requirements. Therefore it's not earmarked for privatisation, she told the Daily News in an interview.

She stressed the importance of the human resources component in the operational success of any organisation. She said: "Who owns the company is immaterial. Does any one know who owns the Hong Kong and Shanghai Banking Corporation (HSBC) or Citibank NA, which are two of the most successful banks in the world? It is the Chairman and the Board of Directors together with the management team who led these institutions to their success.

On the other hand look at the success story of DBS Singapore owned by the government and run as a full private company with total autonomy given by Government. We can learn from them and follow them, They recognised very early the need to get the necessary skills from foreign banks.

The staff have to realise on their own that they have, to change with the changing times. Today no one goes to a bank, unless it's absolutely essential. The bank comes to the customer. This mindset change is my most immediate task. Managing this change is a challenge, because of the culture evolved over a long period of time. They are aware of the need to change and become customer oriented otherwise we will lose all good customers.

She stressed the role of the Bank in rebuilding the nation. "We have had one year of cessation of hostilities, and the Bank of Ceylon has an integral role to rebuild the war torn economy," she said. It were the two state banks which came forward during the crisis period in 1983 and 1988 to help rebuild the economy. We have to do this again. The government has said that it will only legislate and not participate, she said.

It is the private sector which will have to work within a framework of deregulation and privatisation. Lending to government will start reducing rapidly, she said.

The market has to be created for the growth of the economy. Our market is too small for an investor to get a quick return on the investment in the high cost infrastructure projects. The government has to recognise it and resort to packaged development, thus creating the market. Major highway projects are not viable purely from the toll, but if the government can package it with the development of the intermediate towns, immediately it becomes viable.

Similarly in the energy sector we must follow the rest of the world, and start looking at cross border sale and purchase of electricity, thus creating the economies of scale, making it worthwhile for an investment of this magnitude. This is the only way costs can be brought down, she said.

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