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Growth in loan repayments in 2009:
Banking industry performs well
Hundred new branch openings in North, East:
Charumini de Silva
Despite the global economic downturn the banking industry has
performed outstandingly last year. The Central Bank has pursued strict
regulation on the banking sector during the global economic meltdown. As
a result there was not much impact on the banking sector of the country.
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Customers at a bank. Picture by Saliya Rupasinghe |
The banking, insurance and real estate sectors also contributed nine
percent to the Gross Domestic Production (GDP), a senior official of the
Central Bank told Daily News Business.
She said the entire banking system has maintained a fine liquidity,
capital and profit ratio compared to the internal and external factors
during the last year. There was a slight impact on the non-performing
loans as the interest rates were high during that time. Since the
Central Bank had to continue a strict regulation to have a minimal
impact from the global economic downturn and with the reduction of the
interest rates the Central Bank has noticed that there is a growth in
loan repayments.
There will be more economic activities in the country with the
positive economic environment.
The Central Bank has given approvals for over 100 new bank branches
to open in the Northern and Eastern province to expand bank services.
It is important for banks to expand their services in rural areas or
new banks to commence their operations targeting the rural community and
to provide more access for credit,” she said. She said that the
financial market should approach the market with innovative products.
The Central Bank is keen on novel products that suits to the customers
needs, which are not commonly seen in the banking sector so that there
will be competition among the banks and there would be healthy
competition which would benefit all stakeholders in the industry.
The banking industry is adopting simple approaches of the Basel
complaints to reach the advance level in a progressive manner.
“Setting up of the mandatory deposit insurance scheme will enhance
depositors’ confidence and it will be a self-corrective mechanism where
companies would not have to take it as a burden.
This will also help to strengthen the financial system,” the senior
official said. |
