Digital banking fees in Sri Lanka: A case for reform

• A policy framework for fair and inclusive financial services

Sri Lanka’s banking sector is in the midst of its most decisive digital transformation to date. Branch networks are shrinking, physical statements are disappearing, and customers are being rapidly channeled toward mobile apps and internet banking as the primary means of managing their finances.

Yet, at this critical moment of progress, a contradiction has emerged. Even as banks save billions through digital efficiency, customers are increasingly being charged annual digital banking access fees; ranging from a few hundred to several thousand rupees per year, simply for using the very platforms they are being compelled to adopt.

Digital banking is no longer a premium convenience. It is now the default and in many cases the only practical channel for accessing one’s own money. When access becomes effectively mandatory, charging for it raises serious questions of fairness, inclusion, and public policy.

The economic reality: Who benefits from digitalisation?

The financial logic of digitalisation is straightforward. A single urban branch can cost a bank several million rupees annually in rent, staffing, utilities, cash handling, security, and paperwork. Once robust digital systems are implemented, the marginal cost of each transaction drops sharply. Paper statements, manual reconciliations, and large volumes of physical cash are progressively eliminated.

These efficiencies materially improve banks’ cost-to-income ratios and long-term profitability. Yet, instead of these gains being shared with customers, digital banking access fees effectively transfer additional cost onto them. Customers pay more, even as banks operate more efficiently.

A public-sector benchmark in customer centricity

Sri Lanka’s large state-owned banks serve the widest cross-section of the population, including pensioners, rural communities, small businesses, and low-income households.

Despite managing enormous customer volumes and national infrastructure responsibilities, these institutions have largely treated basic digital access as an essential public service, not a revenue extraction tool. Their approach reflects a broader understanding: digital banking is a national enabler, not merely a commercial product.

This stance offers a powerful lesson to the private sector. If public-sector banks, serving the most diverse and economically vulnerable communities, can prioritise access and inclusion, private banks; many of which generate substantial annual surpluses, are fully capable of doing the same.

The unequal burden on citizens

Senior citizens now face shrinking branch services while struggling with mobile technology. Charging them for digital access is not merely a financial issue; it is a human one.

For low-income earners, even a modest annual fee is significant. It represents several days’ earnings and risks discouraging continued participation in the formal banking system.

Rural customers must contend with unreliable connectivity and high data costs. When physical services are withdrawn and digital access is monetised, inequality deepens.

Global practice: Digital access as infrastructure

Internationally, digital banking access is treated as core financial infrastructure and offered free of charge. Banks monetise through lending, investment products, wealth management, and enterprise services; not by charging customers to view balances or transfer their own money.

Sri Lanka should align with this global standard.

Private banks and their moral responsibility

Private sector banks in Sri Lanka play a systemically critical role in financial stability, capital mobilisation, economic growth, and investor confidence. Many record strong profits and rising surpluses year after year.

With that strength comes responsibility. Banks operate within a public trust framework as custodians of household savings and the payments system of the nation.

When banks continue to remove physical services while monetising digital access, the issue moves beyond commercial strategy into the realm of ethical and moral obligation.

A balanced policy way forward

Basic digital banking access should be free. Premium digital services may justifiably be charged for. Full transparency should be mandated on digital infrastructure investment and cost savings. Consumers must be protected during service transitions. Digital banking should be formally recognised as national financial infrastructure.

Conclusion

Sri Lanka stands at a decisive juncture in its financial evolution. The question is not whether digital banking will dominate; it already does. The true question is how fairly and ethically that dominance will be structured.

Free basic digital banking is the foundation of a modern, inclusive financial system. Transparency, fairness, and shared benefit must guide the next phase of Sri Lanka’s digital financial transformation.

(The author is a corporate executive with international banking experience and a strong background in financial-sector modernisation and digital transformation.)