Not a single LC of BOC turned down due to downgrading: BOC chairman

by Sanath Nanayakkare

The recent downgrading of Bank of Ceylon’s foreign debt rating had affected none of the bank’s customers who obtained Letters of Credit (LCs) for foreign transactions, Bank of Ceylon Chairman Kanchana Ratwatte told the media in Colombo yesterday.

When asked whether foreign banks had refused to accept the letters of credit (LCs) issued by the Bank, BOC Chairman said, “If there is any such customer, let him or her come forward.

“Since the downgrading we have not faced any serious issues contrary to claims being made in social media. It is not an issue as far as the Bank is concerned. With the robustness of the Bank’s operations, such a situation has not arisen.

“The use of LCs is a very important aspect of international trade. In 2016, we had four LCs that were not accepted. Then in turn, we also reject certain LCs from other parties. It’s not a matter of the strength of the bank concerned or downgrading as you are intimating. These are normal, ordinary trading activities. Having said that, since the downgrading we have not faced a situation where our LCs were refused. As of now, we don’t have any immediate issues of that nature because our position is strong enough to handle the situation.”

“In the future, we may see higher interest rate due to the downgrading. But that doesn’t mean we are unable to borrow. We have a line of credit with the Asian Development Bank (ADB). That amount was increased by 150% this year. Those funds are also available. The Bank is in a very healthy position. I reiterate that.”