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 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.
“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.
source - www.dailynews.lk
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