CB confirms 5 foreign banks to enter SL

• Recent developments in the country’s political and economic arena have created a surge of interest from foreign businesses: CB Governor
• Regulator plans to link up expatriates and investors 
• Foreign banks in SL expected to play greater role in economic activities

By Charumini de Silva

Sri Lanka’s banking watchdog, the Central Bank confirmed that five foreign banks will make an entry into the country’s financial industry in the near future.

“We have received five applications seeking approval to commence foreign banking operations in Sri Lanka,” Central Bank Governor Arjuna Mahendran told the Daily FT

He said that the recent developments took place in the country’s political and economic arena has created a surge of interest from foreign businesses that are eager to stake a claim in the frontier market.

Giving a tip-off on the banks that are likely to enter the country, he said: “The Japanese bank and the Chinese bank are among the biggest in the world.”

He went on to say that with the entrance of these banks to the country’s financial industry, it will truly open up many opportunities not only for Sri Lankans but also for investors living in those countries.

Noting that the regulator is trying to improve the country’s banking system and boost capital flows to local businesses, the Governor said: “We are looking for banks from other countries. We would like the banking institutions in those countries to, if they do not set up a branch in here, at least tie-up with our banks.”

Further clarifying his point Mahendran said it was a great opportunity for our banks to be linked up with expatriates living abroad as well. 

“We have more than one million people living overseas, especially in countries like Japan, Canada, Australia and the Middle East. With the entrance of these foreign banks we could link up all our people based around the world via intermediaries of their international branch network to channel funds and expertise to several sectors of the economy.”

He asserted that they anticipate the banks’ continuous involvement in the financial sector and economic development in the country. 

“Foreign banks in Sri Lanka are expected to play a greater role in economic activities and make a significant contribution to the economy,” the Governor noted.