BOC Chief sets record straight on LCs

Friday, 8 January 2021 00:28 - - {{hitsCtrl.values.hits}}

Says rejection of LCs, if any, is due to customer/ supplier issues and not linked to bank as it enjoys sound credibility or strong financial standing

Bank of Ceylon Chairman Kanchana Ratwatte yesterday set the record straight about social media reports on alleged rejection of Letters of Credit (LCs) opened by the Bank.

“Rejection of LCs, if any, is due to customer issues and not linked to the bank or due to the lowering of Bank’s rating in line with sovereign rating downgrade,” Ratwatte said.

“In the normal course of business a few LCs get rejected and most often it is because of customer or supplier issues, or terms and conditions. This is standard, like banks having a certain degree of Non- Performing Loans,” the BOC Chairman said, adding that annually there had been a few cases of LCs being rejected.

Apart from having the best balance sheet and being the number one bank, the Chairman also said that recently the ADB credit guarantee scheme for BOC was increased by 150%. Since the country’s credit rating was downgraded by rating agencies, the BOC has opened over 600 LCs and there had been no issues.

Deputy General Manager (International) R.M.N. Jeewantha, said the Bank has no issue when it comes to Rupee or US dollar liquidity. “Being the leader in NRFC inflows as well as big supporter of exporters and importers, BOC plays a key role in ensuring stability of the US Dollar exchange rate,” he added.

BOC has also been the largest facilitator of funds to the Special Deposit Account (SDA) introduced by the Government in April last year.

Commenting on the outlook for 2021, Chairman Ratwatte said that the year will be one of consolidation and further supporting growth. “The biggest challenge we had in 2020, and this year we have seen the first set of tourists coming, while the COVID vaccination is another positive, so we are confident,” Ratwatte added.

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