Central Bank Governor tells Directors:

Work proactively to keep banks safe

Ramani KANGARAARACHCHI

It is a tough job to be a bank director but a director must understand it positively and work proactively to keep the banks safe, said Central Bank Governor Ajith Nivard Cabraal.

He was addressing the Bank Directors’ Symposium on ‘Meeting Challenges in a new era’ at the Galadari Hotel yesterday.

He said that Sri Lanka did not suffer like some other countries during the crisis as the Central Bank Supervisory Department was ready to face the challenge and there was no need to print new currency notes.

He said when the Central Bank targeted USD 6 billion in foreign reserves some people did not believe it. However, the growth level of foreign reserves will be over six next year as it has reached USD 5.2 billion in June this year.

Cabraal said that Sri Lanka could be a financial hub by building capacity, improving better credit skills and having a close supervision in the banks through strong commitment, dedication and careful planning by the directors.

He said that the directors need to find new methods to deal with the crisis and all must work towards one goal and keep the bank stable in difficult times. They need to adopt international best practices and have a compliance culture and move forward.

The banks have performed well during the recent past but there is still a huge potential to improve with new business opportunities in the North and the East.

Sixty-six banks have been opened in the North and the East within a short period and bank lending will be doubled in the next five years, he said.

Sri Lanka’s inflation went up to 12 percent for 30 years but today it has dropped and is stable. As a result of the massive development projects launched by the Government, such as roads, new ports and power projects the poverty level has dropped from 22-15 percent benefiting people all over the country, he said.

The Governor called upon bank directors to strengthen the SME sector in the country by setting up centres to guide them and they will become blue chip companies in the future in countries such as Malaysia and Thailand.

The Central Bank will set up new rating systems and the Bank Act will be amended to fast track prosperity, the Governor said.