Banking as a career

Banks are the life blood of the financial system of a country and therefore its economy. The strength and soundness of banks is vital for a country’s economic development.

There are many types of banks in Sri Lanka; the Central Bank, commercial banks, savings banks, housing banks, development banks, merchant banks and investment banks. Although in the past they performed distinctly different functions in the banking industry, lately, some of these functions appear to be overlapping.

Types of banks

The Central Bank of Sri Lanka is the apex institution in the financial sector in Sri Lanka and is charged with securing the objectives of economic and price stability and financial system stability, with a view to encouraging and promoting the development of the productive resources of Sri Lanka. In its efforts to achieve these objectives, it performs not only the traditional functions of a central bank, but also plays a developmental role.

It is the advisor to the Government of Sri Lanka on economic affairs and banker to the Government of Sri Lanka, is responsible for the management of the public debt of the Government and the implementation of Exchange Control Regulations. It is the banker to commercial banks and is responsible for ensuring the stability of the financial sector.

Commercial banks on the other hand deal with customers at large and accepting customer deposits and providing finance are two of their main activities. They provide current accounts, savings account facilities as well as term deposits such as Fixed Deposits, Certificate of Deposits and Foreign Currency accounts.

On the other hand they provide short to medium term finance such as various types of loans, overdrafts and import/export financing. In the more recent years commercial banks have gone beyond their traditional business areas by moving into leasing and pawning.

Some of them also have limited development banking operations. One of the key differences of commercial banks from other banks is the handling of many types of foreign exchange business transactions.

This they do by virtue of the fact that they, are appointed authorized dealers in foreign exchange by the Central Bank of Sri Lanka. They handle import, export, and foreign exchange transactions for their customers.

Two of the commercial banks are State owned whilst the other local banks are all privately owned. Some foreign commercial banks also have branches operating in Sri Lanka.

There are two savings banks in Sri Lanka and one of them is State owned. The State owned bank has gone beyond its traditional boundaries and moved into granting advances for housing and pawning and also handle inward foreign remittances business.

There are two large development banks, which provide long-term finance. However, they too have moved into short-term financing as well. There are also a number of smaller savings and development banks, which mainly accept deposits from customers and provide small or micro finance facilities.

The only State owned banks, which was exclusively handling mortgage loans have also started diversification to other areas. Merchant banks are now referred to as investment banks and they perform functions such as loan syndications, corporate finance, securitization and derivatives, fund management and financial analysts functions etc.

Bank employees

Banking has been traditionally, a highly respected field and it has always been prestigious to be working in a bank. Being in the service industry the quality and efficiency of service are today considered most important for banks.

Therefore, the staff they wish to recruit must be geared to perform to maintain these high standards. Innovation is considered a key success factor today and therefore the innovativeness is a trait that would be looked at for new recruits.

The most important quality of a banker is his or her integrity. It is extremely important for a banker not to indulge in any act, which may cast the slightest doubt about his or her integrity. Banks in handling their customers business has access to more information about their customers than any other institution.

“Bankers secrecy’ is an attribute which is recognized by law and information about a customer can be divulged by a banker only at the specific request of that customer or under a very few exceptional circumstance specified.

Ability to take responsibility is another key requirement that is looked at from a potential employee. Even the courts demand a higher sense of responsibility from a bank and each employee needs to act with a high sense of responsibility from a bank and each employee needs to act with a high sense of responsibility at all times.

Excellent public relations is a must for banks which are a part of the service industry and therefore a bank will require a recruit to be highly people oriented and have pleasant mannerism. Banks except their employees to work smarter not necessarily work harder at all times and the nature of work is such that he or she must also be a team player.

Joining a bank

Banks recruit personnel at various levels and the names given to the various grades differ from bank to bank. At the lowest level they recruit clerks or banking assistants/ trainee banking assistants.

This grade is meant for applicants without any previous working experience and the minimum qualifications is usually a pass at the General Certificate of Education (Ordinary Level) with five credit passes including Sinhala or Tamil, English and Mathematics or Arithmetic. Most banks also require a pass in two or three subjects at the General Certificate of Education (Advanced Level).

The age limit is usually 21 years for the GCE(O/L) qualified, 23 years for the GCE(A/L) qualified and 26 years for Graduates. The training period is usually two to three years and on satisfactory completion they are recruited to the permanent cadre. Ability to work in a computerized environment is also becoming a mandatory requirement.

Most banks also recruit management trainees. The qualification required is usually a First Class or a Second Class Upper University Degree or a professional qualification such as CIMA, ACCA, ICASL etc. In this case too previous work experience is not required.

The training period is usually about two years after satisfactory completion of which the person is placed in an Executive Grade. Some banks also link a requirement to obtain part qualification in banking before the completion of the training period.

Many years ago banks were managed only by experienced bankers who were given on the job training in all aspects of banking. However, today, this is not considered sufficient to effectively manage the various complexities in the banking industry and banks have started recruiting specialists for the specialized jobs in order to better manage risks and achieve enhanced profitability.

Therefore today banks recruit Chartered Accountants, Management Accountants, Engineers, Marketers, Planning specialists, Human Resources specialists, and a variety of IT personnel for their Information Technology departments.

Career prospects in banks are extremely good and it is possible even for a person who joins a bank at the lowest level to rise up to be a member of their top management over a period of time.

Banking education

Education qualifications in banking, is a must for any banker who wants have career progression. There are two options; the examinations conducted by the IFS School of Finance, United Kingdom, or the examinations conducted by the Institute of Bankers, Sri Lanka (IBSL).

However the first option has become very expensive which is further aggravated by the depreciation of the Sri Lanka Rupee against the Pound Sterling.

The second option is the common choice not only due to the fact that it is very much cheaper but it also of a high standard due to the link up with the Chartered Institute of Bankers (CIB), London under which the examination is moderated.

The IBSL signed a Memorandum of Understanding (MoU) with the Chartered Institute of Bankers (CIB) (London) in Sept. 2000 to conduct three examinations subject to CIB moderation.

The objective of the link up are:

* To offer an internationally recognized qualification in Banking and Finance

* To conduct the following three examinations subject to the moderation of the CIB London.

(a) Certificate in Banking & Finance (CBF)

(b) Advanced Certificate in Banking & Finance (ACBF)

(c) Diploma in Banking & Finance (DBF)

* To award joint certificates signed by the IBSL and CIB (London)

* DBF holders (English Medium only) desiring to obtain Associate membership of the CIB, London (ACIB) and the B.Sc UMIST (Financial Services) are required to sit 4 core papers at the UMIST degree examination.

Candidates proceeding for the ACIB/B.Sc (UMIST) are required to obtain membership registration at the CIB (London) and Student Registration at the UMIST.

Student Membership of the local institute is open to: bank employees, non-bank employees and school leavers.

Thus it is possible to obtain qualifications, which are internationally recognised by sitting for these examinations.

OPA lauds efforts of Science and Technology minister

The Minister of Science and Technology addressed the Organisation of Professional Association on the APRC report-proposals and prospects.

“the efforts taken by Prof. Tissa Vitharana is a significant contribution towards the country’s search for a negotiated settlement to the present conflict”, stated Dr. Hilary Cooray, President Organisation of Professional Association.

He said the Implementation of the Official Languages Act which the OPA is concerned with and the development of mutual trust between the two warring parties are essential in preparing the ground for bringing the two groups on to the negotiating table.

“The All Party Representative Committee and the participation of all political parties (at least at the initial stages) was a very encouraging factor and a positive move towards a negotiated settlement.”

The Organisation of Professional Association appeals to all political parties to participate and debate on the issues raised with a view to reaching a consensus amongst them in order to place it on the negotiating table.

For the start at least, the issues on which all parties could reach agreement should be identified so that a movement could be made towards the end. Prof. Tissa Vitarana gave a detailed outline of the APRC proposals and the power sharing mechanism outlined to resolve the present conflict.

Questions and Answers

Income Tax-Joint Deposit Interest

Question: I am a Private Sector Employees and my gross earnings from employment for the Income Tax year 2006/07 was in the region of Rs.440,000 and the P.A.Y.E. Taxes deducted and remitted to the IRD have looked after the income Tax Commitment on this source of my Income.

I have a joint Fixed deposit with my wife, and the interest earned during the Tax Year ‘06/07 was about Rs. 160,000 and withholding taxes have not been deducted in terms of our declaration. The Joint Fixed Deposit Interest Income is made available entirely to defray our household expenses and it is drawn by my wife and I have been Income Tax payers for a number of years, and the above mentioned salary and interest have been the only sources of income for Y/A 2006/07.

Could my wife declare the full interest earned as her income for the Tax Year 2006/07, whilst I would declare only my employment Income? No sharing of the interest income.

- J. H. R. Fernando ,

Wattala

Answer: Since it is a Joint account, Fixed deposit or otherwise, any interest earned should be declared equally by both parties, i.e. 50% of the interest has to be shown by each of the Joint account Holder. For further clarification you may contact the Department of Inland Revenue, Tax Payers’ Assistance Centre Tel. 2329116.

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Minor Savings Account

Question: Can I open a Joint Savings Account with my daughter, a minor, who is only 16 years of age? In case of an emergency can my daughter withdraw money from this joint account as I intend to go abroad for a short period?

- Mrs. Warnakulasuriya, Moratuwa

Answer: Your daughter who is 16 years of age is considered a minor by Commercial Banks until she is over the age of 18 years. You can open a minor’s Savings Account with any Commercial Bank with you as the Guardian account holder of that account. Your daughter can withdraw up to a maximum of Rs. 5,000 at a time if it can be proven that it’s required for the minors’ use.

Alternatively, you can open a Joint Savings Account only with the NSB (National Savings Bank) which is governed by a Special Act where a child over the age of 16 years is considered a major.

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Sri Lanka TV broadcast to the Middle East

Question: I am glad to hear that your Organisation is trying to solve professional problems according to the Daily News. I am an Engineer who is on approved leave from the State Media and working in Dubai at present. Although we are not in Sri Lanka physically we like to hear day to day happenings in Sri Lanka especially through the Government Media. Unfortunately we don’t have that facility though we earn foreign currency for the country. Sometime back ITN programme was available in the Middle East via. Satellite but it has now been stopped without any reason. I earnestly request you to look in to this.

- Gamini Arambawela,

Dubai, UAE.

Answer: ITN was broadcasting their programme through the Satellite of a Private TV Station and we understand that the contract is over and not renewed. TV Lanka who used to broadcast the ITN programme is now broadcasting their own programmes including news via satellite. You will have to purchase their Smart Card to view their programme which will cost USD 63 for 6 months or USD 105 per year. For further details you may contact TV Lanka on their e-mail address [email protected] The MTV Programme is also available as a paid channel. You can get Sri Lanka news free of charge on www.lankapage.com.itn news can be seen on www.itn.lk. The good news is that from the 10th of April the ITN programme will be available from 7.00 p.m. - 9 p.m. daily through an Italian company. Please keep checking on the ITN Website

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Further clarification on excepted premises and ejectment of tenant

Question: (i) I should be much grateful to you if you would kindly clarify the following legal issue. Commercial premises put up in late 1960s in a Town Council area. The local Authority has annual values only from 1775 which is over Rs. 1,000. The annual values only prior to 1975 not available even in the Valuation Department. Is the premises concerned an excepted premises?

(ii) If the tenant is in arrears of rent for over three months is he liable for ejectment?

- F. Sameem ([email protected])

Answer: (i) It is unfortunate that the information given in the question is insufficient to provide direct answer to the query raised by the reader. In order to ascertain whether the premises falls within the category of ‘excepted premises’ the following facts have to be established:

(a) The dates of commencement of the present tenancy

(b) The present status of the local authority with which the premises is situated.

If the present tenancy has commenced before 1988.01.01, and if the Annual Value of the premises as at 1968.01.01, exceeds Rs. 1,000 then the premises is an excepted premises. As the Annual Value in 1975 is over Rs. 1,000 it is reasonable to assume that the Annual Value in 1968 is also likely to exceed Rs. 1,000 and therefore the premises is likely to fall within the excepted premises category. If there is a doubt, parties can apply to the Rent Board under Section 4 (3) of the Rent Act for a determination.

If the present tenancy has commenced after 1988.01.01 and if the present status of the local authority is a Pradeshiya Sabha, the 1968 Annual Value has no relevance. The criteria for the determination of ‘excepted premises’ is the rent that was charged at the commencement of the tenancy. If such rent exceeded Rs. 1,500/- per annum the premises can be considered as an excepted premises.

If the present status of the local authority is an Urban Council and if the present tenancy has commenced after 1988.01.01, and before the conversion of the local authority to an Urban Council, again 1968 Annual Value has no relevance. The criteria for the determination of ‘excepted premises’ is the rent that was charged at the commencement of the tenancy. If such rent exceeded Rs. 1,500 per annum the premises can be considered as an excepted premises. However, if the present tenancy commenced after the conversion to an Urban Council, and if 1968 Annual Value exceeds Rs. 2,000 the premises becomes an excepted premises.

If the present status of the local authority is a Municipal Council that is converted from an Urban Council, and if the present tenancy has commenced after such conversion, and if 1968 Annual Value exceeds Rs. 4,000 the premises becomes an excepted premises.

In all the above instances where 1986 Annual Value is relevant but not known or it cannot be reasonably considered as exceeding Rs. 1,000, Rs. 2,000 or Rs. 4,000 as the case may be, the parties can apply to the Rent Board under Section 4 (3) of the Rent Act for a determination.

(ii) Yes

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Consultation of Orthopaedic Surgeons

Question: What is the name and telephone number of the doctor in charge of the Orthopaedic Clinic of the National Hospital, Borella and the place where he is having channel practice.

- H. Henry - Sirimal Uyana,

Ratmalana

Answer: There are four Orthopaedic Surgeons at the National Hospital and no one person is in charge as such. They are Dr. Upali Banagala, Dr. Vasantha Perera and Dr. Punchihewa and can be channelled at the Nawaloka Hospital (Te. 2304444), Dr. Pinto can be channelled at the OASIS Hospital (Tel. 2369113) and Dr. Upali Banagala at the Asiri Surgical Hospital (Tel. 4524400).

Please send in your questions

The Organisation of Professional Associations of Sri lanka (OPA) will cover questions in all professions and subjects of common interest to the public in the “Daily News OPA at Your Service” page every Thursday.

Please make your question brief. Questions can be directed to the OPA on

e-mail: [email protected] or [email protected], [email protected]

Fax: 2559770 or

write to the

Professional Centre, 275/75, Prof. Stanley Wijesundera Mawatha, off Bauddhaloka Mawatha, Colombo 7.