NSB: 41-year legacy of financial inclusion and economic empowerment

Friday, 15 March 2013 00:01 -     - {{hitsCtrl.values.hits}}

“The new bank will provide variety in the savings facilities offered to the public so that the preferences of different classes of depositors, particularly those in the rural sector, could be effectively exploited,” said Dr. N.M. Perera in his maiden budget speech in 1970, emphasising the need of a bank that facilitates “the different classes of depositors, particularly those in the rural sector,” to access financial instruments like savings and credit and thereby economically empowers them.

Dr. N.M. Perera foresaw inclusion of people in the financial system as a pre-requisite for economic growth and poverty alleviation. As the budget was passed, he lost no time in forming National Savings Bank in 1972 with the expressed objective of ‘promotion of savings among the people, particularly among those with limited means, and the profitable investment of savings so mobilised.’

Even though ‘financial inclusion’ as a development goal had not gained importance at the time, that was exactly what Dr. N.M. Perera had in mind in forming NSB. He had clearly identified the geographical dimension of financial inclusion – providing financial products to underserved population in rural and remote areas and the product dimension – offering accessible and affordable services, adapted to the specific needs of low income population and the need for catering to their needs effectively.

Banking of the under-privileged was later taken up elsewhere in the region, in Bangladesh in 1976 with the Grameen movement of Muhammad Yunus the Bangladeshi Nobel Laureate who said: “People were poor not because they were stupid or lazy. They were poor because the financial institutions in the country did not help them widen their economic base,” echoing the same ideals expressed by Dr. N.M. Perera in 1970.  

National Savings Bank, which came into being as ‘the poor man’s bank’ in 1972 celebrates its 41st anniversary on 16 March 2013 and takes pride in over four-decades of financial inclusion and economic empowerment of the people of the country. Started on such a humble note, the bank has risen to the status of being Sri Lanka’s largest specialised bank and the third largest of all banks in terms of deposit base.

The success of National Savings Bank essentially reflects the success of the people of the country and the four decade saga bears testimony to how the people of the country, especially the low income and rural segments, came out of financial exclusion to actively take part in the economy.

Inculcating the habit of savings and thrift among the people of the country was the task NSB was entrusted with at the formation and the bank’s customer base, the largest of all banks in Sri Lanka, alone is testament to the fact that the bank has fulfilled its founding objective. The bank is very close to the people’s heart and the undeniable truth is that almost all Sri Lankans have learnt the ABCs of saving from National Savings Bank.

“In its over 40 year history, NSB has evolved itself from a traditional savings bank to a modern retail bank that aspires to be the best choice for savings and investment solutions. The bank that had defined itself initially as the bank that taught savings to the nation and later, the family bank, now re-defines itself as the leader in developing the people and the country,” said NSB General Manager/CEO H.M. Hennayake Bandara.

“In its four decade existence, NSB has been able to grow itself to be one of Sri Lanka’s biggest banks and also one of the most influential state institutions by continuing to empower the rural and the low-income earning people and empower the country’s development through savings mobilisation.”

Despite its specialised status, NSB stands tall among the commercial banking giants with formidable numbers: Rs. 510 billion assets and Rs. 468 billion deposits by the end of 2012. The bank has been aggressively expanding its network in the past few years and today it boasts of a network of 222 branches spread across the island.

NSB continues to cherish its ties with the postal network and takes pride in being able to reach every nook and corner of the country in providing savings banking to the people of the country. “The bank’s activities mainly focus on financial inclusion, which is evident in our wide reach of branch network, the add-on products and services as well as CSR activities. Our objective is to mobilise people’s deposits and give back to them in the form of credit so that their individual economies are strengthened,” added Hennayake Bandara.  

The bank, during the last decade, passed many milestones including winning international, regional and local accolades. While continuing to be affirmed with AAA long term credit rating by Fitch Ratings for the 10th consecutive year, NSB made its mark in the global arena with its annual report for 2010.

Creating history as the most awarded annual report of all times, NSB Annual Report 2010 was ranked the world’s fourth best report and Asia Pacific’s second best report at the LACP Vision Awards, USA and won the Gold Award for Management Commentary at the Annual Report Awards by the Institute of Chartered Accountants of Sri Lanka for the first time in the bank’s history.  

Completing 41 years in its journey with the people of the country, NSB has achieved so much in so little time as a specialised savings bank. The bank’s success is unparalleled as it has been achieved without compromising any of the founding principles or discriminating any of the customer segments in its pursuit of success. Despite changing social, economic and political phenomena, the bank remains the bank of all Sri Lankans.

Future, according to forecasts, provides a positive outlook for the country, which is well positioned compared to global conditions. In 2013 and beyond, the banking industry is expected to flourish in a scenario of increased growth of domestic market, reduced unemployment, increased labour productivity and accelerated poverty alleviation.

Today, the local banking industry records assets worth Rs. 5.1 trillion which were only Rs. 1 trillion 11 years ago. The assets of the industry have increased four-fold in the past decade and according to the predicted economic growth and the increase of per capita income over US$ 4,000, the banking industry will have to maintain a high growth rate to reach the desired macroeconomic outcome, as a result of which the banking sector assets are expected to double over the next four to five years.

Such a macro environment presents NSB – the premier savings bank, a myriad of opportunities to grow its business through diversification of operations, upgrading systems and processes, expanding the range of products, concentration on cost efficiency, resource utilisation and enhancement of the quality of human resources.

“NSB, being a state owned savings bank, has an immense responsibility towards the people and the country. We have always sought to empower people through long term initiatives, the value of which accrues in the long term. As we complete 41 years in business, I, together with the NSB staff, would like to express our sincere gratitude to the people of the country for the confidence they have placed in us and assure that, true to our fundamentals, we will continue to serve the people and empower them through savings and investment,” concluded Hennayake Bandara.