Positive economic environment:

More Banks for rural areas

Charumini DE SILVA

There will be more economic activities in the country with the positive economic environment and the local financial sector would need more banks to cater to this demand.

The Central Bank of Sri Lanka

At present there are 22 licensed commercial banks and 14 licensed specialized banks in Sri Lanka. However, the country’s economy needs more banks to cater to the demand.

It is important for banks to expand their services in rural areas or new banks to commence their operations targeting the rural community, a senior official of the Central Bank told Daily News Business.

“We welcome all commercial banks, specialized banks and those who are keen to set up new banks in rural areas since there is a shortage of banks in these areas.

The expansion of banking services will help to develop rural livelihoods too”, he said.

State banks made their presence in rural areas and most private banks are in the process of expanding their branch network in rural areas under the licensed commercial banks category.

He said those who wish to enter the local financial industry will have to consider their stability according to the Central Bank rules and regulations to maintain the stability of the industry.

Another senior official of the Central Bank said that they were not looking for conventional products in commercial banks.

“We are keen on innovative products that are not commonly seen in the commercial banking industry, so that there will be competition among the commercial banks and there would be healthy competition which would benefit all stakeholders in the industry”, she said.

According to the Central Bank there are 35 registered finance companies in the country and 11 primary dealers have been appointed by the bank to deal in government securities.