CB Chief tells bankers don’t ignore unprofitable sectors

By Cassandra Mascarenhas

Central Bank Governor Nivard Cabraal last night urged bankers not to ignore unprofitable sectors since growth in all segments of the economy was critical for the country.

“We examine an economy roughly under three areas – agriculture, industry and services. If you have certain areas that are lagging behind, it shows you that there are pressures building up in that area, which is why we need to ensure that the growth is sustainable and is happening in all areas,” Cabraal pointed out.

“If you exclude certain sectors of the economy as not being as important as the others, it does not ensure the growth of your economy so you need to balance all these sectors. Bankers, there is a responsibility for you to ensure growth in sectors that are not obviously profitable to yourselves but other sectors as well,” the Central Bank Chief said in his address at the ceremonial opening of the 23rd anniversary convention of the Association of Professional Bankers (APB) Sri Lanka under the theme ‘Banking Foresight – Shaping Integrated Development’.

Hundreds of bankers attended the inauguration of the event, considered the pinnacle in the calendar of APB.

Technical sessions take place today at the HNB Towers Auditorium featuring key personalities from both the public and private sector and over four technical sessions will explore the role of Sri Lankan banks in the current economic context and will conclude with a panel discussion.

To reinforce his message to bankers, Cabraal in his address also outlined some factors that would constitute integrated development. This included inclusivity, for people not fully integrated into the banking sector to be brought into it; sustainability, the need to have a plan that ensures that development continues to take place so that it can be enjoyed over a long period of time; and the coverage of growth, in terms of how much of the country or industry an organisation’s growth integrates and covers.

The Governor also encouraged the growth into new areas, a diversification of portfolio investments in order to sustain growth for a long time.

“We have encouraged oil exploration, fisheries and health services on a broader scale as they will all create an additional impetus on the economy and this is vital for any country. There are always avenues of growth opening up and bankers need to have the foresight to venture into these new areas so that it shows that you are keeping abreast of the growth of the economy.”

The Central Bank Chief also called for the sustenance of macroeconomic fundamentals and the promotion of entrepreneurship within the country.

“The banks themselves need to stay strong as if you are not strong, you can’t assist anyone else. Banks need to leverage on their own balance sheets; for that we have seen reluctance and they have not been able to leverage their balance sheets well enough, use that to develop your new streams of inflows that will allow more lending – all banks need to reflect on this over the next few years.”

APB President W.A. Nalini, who is also the General Manager of Bank of Ceylon, said: “The theme is based on timely issues of much significance to bankers and all stakeholders of development and is very topical as it reflects the vital and influential role that banks in Sri Lanka are expected to play in the present context.”

“Development is key in all economic sectors, including livelihood of people across all regions; development should be truly national and all inclusive,” she added.

“Harmonious PPPs are a key ingredient in harnessing the growth potential for long-term sustainable development and it is very appropriate that the banking sector should take the lead in economic development. The trends in the global market are likely to challenge and threaten the economic priorities and in this context, there is a need from the banking sector to bring together all stakeholders to gear up to take the country to great new heights,” the APB Chief said.

As done annually at the convention, the APB last night recognised the outstanding contribution made by an individual to the banking industry and this year presented the award to Sampath Bank’s former Deputy General Manager and PIM Management Consultant Parama Ranjana Dharmawardene.