BANKING SYSTEM IN SRI LANKA

BANKING SYSTEM IN SRI LANKA

Bank of Ceylon (BOC) is the first Bank in Sri Lanka.Bank of Ceylon (BOC) began on 1st of August 1939 under Bank of Ceylon Ordinance No. 53 of 1938, the Governor of Ceylon, Sir Andrew Caldecott, declared open the maiden office of Sri Lanka's first state-owned commercial bank in Fort, Colombo.

The Sri Lankan banking industry was changed during the late 1980's with the introduction of automation by private banking corporations. Previously, few foreign banks operating within Sri Lanka with few branches such as Hongkong and Shanghai Banking Corporation, etc. HSBC were using interactive electronic customer interfaces such as automated teller machines (ATMs). These facilities were limited to higher end customers.

In 1986, Sampath Bank opened, offering customers access to their account from any branch, instant money transfers within cities and access to automated teller ATMs). Today, the entire banking sector in Sri Lanka offers the automated banking systems with ATMs for customers, for faster, and after-hour services. The working hours of the Sri Lankan banking sector have now changed from 8 hour, 5 days a week system to a 24/7 service. Telephone banking and internet banking facilities have become more popular added features of the banking industry with the growing popularity of modern telecommunication technology among Sri Lankans.

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The banking sector in Sri Lanka accounts for almost 60% of the assets in financial sector. The central bank issue banking license for two categories.

o   Licensed Commercial Bank-26

§  Local banks-13

§  Foreign Banks-13

o   Licensed specialized banks -7

Licensed commercial banks and Licensed specialized bank

                Only LCB are permitted to operate current account and are authorized dealers in foreign exchange transactions with central bank approvals.

03 sri Lankan banks are included in world top 1000 banks

v  BOC

v  Commercial Bank

v  HNB

Banking sector Highlight-March 2019

Ø  Net Assets                          11.7 Tn

Ø  Loans and advances           7.6 Tn

Ø  Deposits                              8.6 Tn

Ø  Borrowings                         1.6 Tn

Ø  Capital fund                        1Tn

Ø  Profit                                   60 Bn

Ø  Branches                             3582

Ø  ATM                                   5031

Ø  Employees                         58579

Minimum capital Requirement for banks

·         Locally incorporated LCBs                             - Rs.20Bn

·         Banks incorporated outside Sri Lanka

o   With assets over Rs.100 Bn          - 10Bn

o   With assets up to Rs .100Bn         -  5Bn