SLCB Cabraal: Sri Lanka follows might with money
Central bank governor says bank branches in north will double; New sovereign bond possible
"The new bank branches will ensure that money gets circulated in the north quickly, that remittances get delivered, and that people can get finance to set up new businesses"
Ajith Nivard Cabraal, SLCB
Sri Lanka’s central bank governor, Ajith Nivard Cabraal, says the number of bank branches in the war-torn north of his country will almost double this year. In an interview with Euromoney during a visit to London, Cabraal says he has awarded 70 branch licences to be opened this year in the north. There are only 80 existing branches in the north, which is about a third of Sri Lanka’s land area. Cabraal says banks will also open branches in those areas most affected by the conflict, where there are no existing branches.
"We have persuaded banks to open branches and lend more in the north through moral suasion as well as through giving them various targets," says Cabraal.
HSBC became the first foreign bank to open a branch in the north last month. This was in Jaffna, the capital of the Northern Province. With state-owned banks holding roughly 50% of banking assets in Sri Lanka, the governor says the new branch licences in the north have been given in roughly equal proportion to state-owned and private banks.