Lankaputhra gets nod for NRFC, RFC accounts

Shirajiv Sirimane

The Lankaputhra Development Bank (LDB) would be launching NRFC and RFC accounts for their customers and for Lankan expatriates based overseas next year.

CEO, LDB. Shiromi Wickramasinghe said they have received the green light from the Central Bank to introduce these accounts. "We are currently in search of a Exchange house overseas for this operation," she said. The bank initially hopes to launch from the Gulf, as there is a strong local expatriate force.

"We have also noted that most of the house maids who are based in the Arabian countries use unconventional ways to remit their money," she said.

Last year's foreign remittances to Sri Lanka was around Rs. 2.8 billion and it was estimated that an equal amount was channelled to Sri Lanka through non-banking methods. "We hope that with the NRFC accounts the non banking channels would reduce," she said.

Wickramasinghe said the bank would merge with the SME bank to provide a better service to their customers.

"This merge would be effective from January 1 and all operations would be coordinated from their office from Maitland Crescent, Colombo 7."

She said that the decision to merge both banks was taken to minimise overheads and by this move the Treasury would save over Rs. 1.5 million a month and operations would be simplified. "We like to assure that none of the employees would be reduced and they would be absorbed to the LDB," she said.

The delay to merge these banks was due to the delays at the Registrar of Companies and this has now been overcomed. The merger would also help to gain around 40 employees from the SME bank to the LDB.

The LDB has a deposit base of Rs. 6 million and they are looking to increase it to around Rs. 10 million next year. Their bank lending has now reached Rs. 75 million. LDB presently has branches in Kegalle, Hambantota and Polonnaruwa and are hoping to open five branches next year, which would help them to increase the customer base.

The CEO said LDB is Sri Lanka's only Development bank and one of the key differences between a commercial bank and the LDB is the 12 per cent low interest rate that is being offered.

Promoting SME growth in rural areas is the main aim of this new bank and it is funded by the Government. In addition to providing monetary assistance, technical assistance would be provided for develop SMEs projects.