Banks to perform well this year
Should merge for country’s benefit:
Sanjeevi JAYASURIYA
The country’s banking industry will progress further during this
year, a top banking official said.
The banking sector in the country will perform well this year.
Brisk transactions at a bank. |
The banking sector in the country will perform well this year and
volumes are coming in. The sector will record growth in number of
transactions and revenue as well. This is a positive indication that the
financial sector in Sri Lanka is more resilient and could forge ahead in
stable economic and political conditions, Sampath Bank Managing Director
Harris Premaratne told Daily News Business.
Harris Premaratne |
“The concept of Colombo being the financial hub will materialise with
the financial industry sustaining the growth momentum. However, there is
a need for large local banks to achieve this,” he said.
“Sri Lanka should take Singapore’s banking system as a role model and
set up large local banks. Singapore has three large local banks and has
a thriving financial sector. We need to apply the same model and merge
the small banks into a few large banks,” Premaratne said.
One of the advantages of having few large banks in the banking
industry is the capacity to fund mega development projects. The country
is on a rapid socio-economic development drive where large scale
infrastructure projects are underway at present. These projects could be
funded within the country when there are high capital structured banks
to lend money for the Government, he said.
The country secure funds from foreign countries and donor agencies
because the banking sector is unable to raise massive amount of funds to
carry out the mega projects. The country has no option, but to go for
syndicated loans with foreign banks to implement development projects.
“There should be an enabling regulatory framework where banks could
merge for the benefit of the country. The consolidation in the banking
sector will yield far reaching benefits to the country,” Premaratne
said. |