Business
Lending rates are basically decided by customers: BOC GM/ CEO
By Sanath Nanayakkare
Veteran banker Russel Fonseka who is the General Manager/ CEO of Bank of Ceylon said last Thursday that it is basically the customer who decides the lending interest rate according to the profitability and financial viability of their business operations.
He said so in response to a question posed by The Island Financial Review at a press conference where the BOC announced a new SME loan quantum of Rs. 5 billion for small and medium enterprises (SMEs) and startups.
“The Central Bank’s independence in making its monetary policy is a positive thing for the financial market as well as our customers because the Central Bank will be making those decisions according to market conditions. At the end of the day, interest rates are decided by the market. Even BOC’s lending rates are basically decided by our customers. If they are not okay with the interest rates we offer when they compare with their sales targets, profitability and other financial aspects of their operations, they will make their own decision. In most of the cases, our lending rate is decided by the customer. Our customer is the person who gives the interest rate. They would say, ‘this is the interest rate we can afford to pay. If you can offer it, we will take it, or otherwise, we will go to other banks. So, our task is to see whether we can match the customer’s requirement and do business with them, “he explained.
“BOC has the largest deposit base, so we have the ability to offer better lending rates. Further, as the Central Bank has decided to reduce the Statutory Reserve Ratio (SRR) applicable on all rupee deposit liabilities of Licensed Commercial Banks (LCBs) by 200 basis points, from 4.00 per cent to 2.00 per cent, that will accrue great improvement in BOC’s liquidity levels as well,” he pointed out.
When asked by how much exactly the favorable SRR would raise BOC’s liquidity levels, he replied,” We are getting a significant amount because of the reduction in SRR,” without disclosing an exact number.
Responding to how BOC could offer Rs. 5 billion worth SME loans 5% below current market rates, he said,” Although we offer the new SME loan scheme loans at 12.0 for applicants with collateral and at 12.5% for applicants with no collateral, our funding cost is a little bit higher. But when we compare this Rs. 5 billion loan quantum with BOC’s total exposure in lending which is about Rs. 2,300 billion, this Rs. 5 billion is nothing for BOC. That is why we are in a position to offer this Rs. 5 billion quite comfortably to support the recovery and growth of SMEs.”
Referring to non-performing loans (NPLs), BOC GM said,” Because of the economic conditions, our NPLs at 6%, is a little bit high, but the key thing here is we haven’t written off any loan facilities given in the past 10- 15 years.”
When asked about the Domestic Debt Optimization (DDO) and, repayment of Sri Lanka Development Bonds in LKR, a senior official of BOC said,” We have been given different options. We have carefully analyzed the operational environment. We have made the required provisioning and there won’t any impact on our performance as a result of the DDO. We will be releasing our 2Q financial report this week. The challenges from NPLs are abating now as our customers are having improved cash flows, so we can maintain our asset quality position which you will see in our 2Q financial report.”
BOC is analyzing which treatment of debt exchange would best suit the Bank and the Bank’s senior management and the Board of Directors would decide on which option to take. The Bank affirmed this important decision would be an internal decision.
The Delegation of German Industry and Commerce in Sri Lanka (AHK Sri Lanka) proudly facilitated the first-ever Sri Lankan delegation’s participation at Drupa 2024, the world’s largest trade fair for the printing industry and technology. Held after an eight-year hiatus, Drupa 2024 was a landmark event, marking significant advancements and opportunities in the global printing industry.
AHK Sri Lanka played a pivotal role in organising and supporting the delegation, which comprised 17 members from the Sri Lanka Association for Printers (SLAP), representing eight companies from the commercial, newspaper, stationery printing, and packaging industries. This pioneering effort by AHK Sri Lanka not only showcased the diverse capabilities of Sri Lanka’s printing sector but also facilitated vital bilateral discussions with key stakeholders from the German printing industry.
Business
Unveiling Ayugiri: Browns Hotels & Resorts sets the stage for a new era in luxury Ayurveda Wellness
In a captivating reimagining of luxury wellness tourism, Browns Hotels & Resorts proudly unveiled the exquisite Ayugiri Ayurveda Wellness Resort Sigiriya. This momentous occasion, celebrated amidst a vibrant and serene grand opening on the 6th of June, heralds a new chapter in the Ayurveda wellness tourism landscape in Sri Lanka. Nestled amidst 54 acres of unspoiled natural splendour, Ayugiri features 22 exclusive suites and stands out as the only luxury Ayurveda wellness resort in the country offering plunge pools in every room, rendering it truly one-of-a-kind.
The grand opening of Ayugiri Ayurveda Wellness Resort was an enchanting event, where guests were captivated by the melodies of flutists and violinists resonating through Sigiriya’s lush landscapes. As traditional drummers and dancers infused the air with vibrant energy, Browns Hotels & Resorts’ CEO, Eksath Wijeratne, Kotaro Katsuki, Acting Ambassador for the Embassy of Japan and General Manager, Buwaneka Bandara, unveiled the resort’s new logo, marking a significant moment witnessed by distinguished guests from the French Embassy, Ayurveda and wellness enthusiasts along with officials from the Sigiriya area, LOLC Holdings and Browns Group.
“Our strategic expansion into wellness tourism with Ayugiri Ayurveda Wellness Resort Sigiriya symbolises a significant milestone for Browns Hotels & Resorts. Wellness tourism has consistently outperformed the overall tourism industry for over a decade, reflecting a growing global interest in travel that goes beyond leisure to offer rejuvenation and holistic well-being. By integrating the timeless wisdom of Ayurveda with modern luxury, we aim to set a new standard in luxury wellness tourism in Sri Lanka. Whether your goal is prevention, healing, or a deeper connection to inner harmony, Ayugiri offers a sanctuary for holistic well-being” stated Eksath Wijeratne.
Ayugiri encapsulates the essence of life, inspired by the lotus flower held by the graceful queens of the infamous Sigiriya frescoes. Just as the lotus emerges from the murky depths, untainted and serene,
Ayugiri invites guests on a journey of purity and rejuvenation, harmonised with a balance of mind, body and spirit, the essence of nature, echoes of culture and the wisdom of ancient Ayurvedic healing.
HNB General Insurance, one of Sri Lanka’s leading general insurance providers, has been honored as the Best General Bancassurance Provider in Sri Lanka 2024 by the prestigious Global Banking and Finance Review – UK.
The esteemed accolade underscores HNB General Insurance’s unwavering commitment to excellence and its outstanding performance in the field of bancassurance. Through dedication and hard work, the HNB General Insurance team has continuously endeavored to deliver innovative insurance solutions, cultivate strong relationships with banking partners, and provide unparalleled service to customers nationwide. This recognition is a testament to the team’s dedication and relentless pursuit of excellence in the bancassurance business.
“We are honored to receive this prestigious award, which reflects our team’s tireless efforts and dedication to delivering value-added insurance solutions and exceptional service through our bancassurance partnerships,” said Sithumina Jayasundara, CEO of HNB General Insurance. “This recognition reaffirms our position as a trusted insurance provider in Sri Lanka and motivates us to continue striving for excellence in serving our customers and communities.”
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