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By Ravi Ladduwahetty

Sri Lanka's biggest bank - the Bank of Ceylon will intervene to regain Rs. 40 billion which is lost to the country annually from migrant workers in the Gulf, Singapore, Korea and Italy where these innocent employees are duped by middlemen, BoC Chairperson Sumi Moonesinghe told the Daily News.

These workers get deceived by the middlemen who promise to deliver these remittances at the homes of their beneficiaries and later repatriate only around 70 percent of the remittances. They also have the added advantage of getting the benefit of the foreign currency exchange fluctuations.

"The bank will hold awareness programs in these four countries in a bid to regain these funds to the legal economy from the informal one," Moonesinghe said in an interview.

The BoC has agents in those countries and we will work through them. There are money transfers in those countries, virtually at every street, she said.

Moonesinghe said that it was the BoC's aim to tie up with the Ministry of Labour and Employment and work closely with the employment agencies. These migrant workers will be given loans from the BoC so that they do not have to pay off extortionists, she said.

The BoC will also make arrangements to have the overseas vacancies published at each of its 235 branches so that Sri Lankans will be aware of the vacancies. BoC will also give them education on how to open Non Resident Foreign Currency (NRFC) accounts and it will also help them to operate Automated Teller Machine (ATM) cards in Sri Lanka in the home towns of their loved ones. The BoC banking charges are the lowest in the market at present, she said.

Responding to a question as to whether setting up BoC branches would be a panacea for this malady, she said:" There is no need to start BoC branches in those countries as we have corresponding banks in those countries with whom we have an excellent working arrangements."

"We have a large deposit base from them. I fully agree that these banks charge heavily for these transfers and it is due to that these migrant workers use these middlemen who deliver their earnings to their doorsteps," she said.

The BoC Chief also said that her bank was interested in funding long-term infrastructure development projects such as power where operational synergies in the SAARC region could be harnessed.

Citing an example, she said: "There could be a situation where there is a consortium of investors who would want to set up a thermal power project in Sri Lanka for not only domestic supplies but also export to India and the rest of SAARC. We will be definitely interested in such a project."

"If the requisite framework is created with the linkages to the SAARC region, then there are prospects for cross border trade. Operational synergies could be harnessed such as providing thermal power overseas or bringing in supplies from India through the connection of grids. The BoC will be willing to finance such major infrastructure projects," she said.

Responding to a question as to whether the bank will continue to expand the branch network which stands at 235 today, she said: "we do not see the need to expand the branch network. What we need to do is to interlink the existing branches, but it will take at least two years from the date of commencement of this ambitious project. The priority of the BoC is to be interconnected. A two year period to wait is a very long time to wait. That will provide the answers to all this and where we can even do share trading on the Internet following the Colombo Stock Exchange plans to go into Internet trading of equities and debt through our branch network, she said. The Daily News Business page Lead Story on November 20, 2002 exclusively reported that the CSE plans to go into Internet trading of equities and debt through branch networks of banks and agents)

She proposed that a joint venture company be formed for the development of banking software in which all banks could have equity stakes.

"I do not see any reason why a small country such as Sri Lanka which has 22 banks have to develop software individually. However, the banks which developed software 10 years ago, have the cutting edge now.

The industry can save a lot of money by setting up one company for the development of software where all the banks can have equity stakes in this company, she said.

Responding to a question about whether the BoC will also see a strategic investor in accordance with a proposal from former Ceylon Chamber of Commerce Chairman Chandra Jayaratne to Prime Minister Ranil Wickremesinghe a few months ago suggesting that all state banks will be divested, she said that there was no tangible reason for this Bank to be privatised at this juncture.

The Bank of Ceylon has a very strong Balance Sheet, asset base and a Capital Adequacy Ratio far in excess of Central Bank stipulations and there is no need for divestiture, she said.

However, if the Government as the chief shareholder of the Bank of Ceylon believes that the Bank is unable to compete with the private banks and if there is an erosion of market share, then the Government will have no option. "But, I and my Board of Directors will give the bank the requisite leadership so that we will remain competitive."

The private sector is not the engine of growth. It is the market that is the engine of growth. Sri Lanka cannot develop without bringing the international market to the doorstep, she said.

(See full interview tomorrow)

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