Strong lending portfolio of Rs. 2b by December:

SME Bank, Lankaputhra merge

Ramani Kangaraarachchi

The SME Bank and Lankaputhra Development Bank will be amalgamated to make one large and stronger premier development bank to uplift the living standards of the rural community.

The amalgamation will come to effect from November 01.

Both banks are owned by the Government and the amalgamation proposal has been approved by the Monetary Board of the Central Bank of Sri Lanka.

General Manager, CEO of Lankaputhra Bank Siromi Wickramasinghe said this decision was taken as there is a dearth of development banks where people could come and seek assistance for various development projects.

She said that in the context of the vacuum created with the privatisation of the two development banks, the National Development Bank and the DECC, this amalgamation will be very useful for the country.

According to Wickramasinghe the total lending portfolio of Lankaputhra Bank would be Rs 2 billion by the end of this year and now it has lent Rs 1.5 billion and another Rs. 500 million will be approved shortly.

The SME bank has Rs.350 million worth of lending portfolio. The amalgamated bank will be known as Lankaputhra Development Bank and will be located at Maitland Crescent Colombo. Two fully fledged branches will be opened at Polonnaruwa and Hambantota shortly as there is a great need in those areas.

Wickramasinghe said the bank has already got licence to open up NRFC and RFC accounts to get foreign currency remittances and are in the process of tapping Sri Lankan employees in Middle East countries and Europe.

The bank has already received 9700 loan applications from low income earners in rural areas for agricultural based projects under “Krushi Navodaya” programme which are now in the process of registering and monitoring. Apart from that, the bank has supported a number of paddy mill owners to purchase machinery, fisheries community to purchase fishing boats.

The owners of nine closed down garment factories have got assistance to re-open them.

It has also supported the local shoe industry in order to curtail importation of shoes and to enhance the local industrialists.

SME and Lankaputhra banks were established in 2004 and 2006 to uplift the SME sector. The amalgamation originated from a policy objective contained in the Government’s Budget proposals of 2007 with the intention of establishing the combined business entity to be a financier catering to a wider range of funding needs in terms of finance and human resources which are required to achieve the Governments development objectives to benefit the nation.