CB keen on tapping into rich credit lines overseas

By Charumini de Silva

Following the successful visit to Dubai, Sri Lanka’s banking regulator is keen on exploring more opportunities for credit lines and technical corporation pacts, a senior official said.

Central Bank Governor Arjuna Mahendran told the Daily FT that they are keen on tapping into rich credit lines especially in the Middle East (ME) to boost capital flows to Sri Lanka.

“We will definitely look into opportunities of this nature because that is one area I would like to pursue. The next destination we are looking at is Saudi as it is the richest country in the Middle East,” he added.

He went on to say that the broad idea of this is to attract funds that are held by Sri Lankan expatriates living in Middle East region to be utilised in the country’s economic activities.

“At the moment we get an inflow of about $7 billion as remittances and if we can double that amount in the next two to three years, it would be a huge opportunity for the country to finance our developments. I want to create that confidence where Middle East banks are linked up with our banks,” he explained.

Commenting on the recent visit to Dubai, Mahendran said that the commercial banks were able to raise a considerable amount of money and it was a very successful visit.

“I do not want to raise expectations too early, but many things will definitely happen,” he revealed. 

Further he said that there will soon be a major announcement between a bank in Sri Lanka and one in the UAE, where they will launch direct remittances free of charge.  

He asserted that he would like to see the banking facilities in Dubai closely linked with the banking facilities in Sri Lanka. 

“The UAE is a peculiar country, where the local population is about 800,000 and there are about four million foreigners, of which 300,000 are Sri Lankans. Those people have a lot of love for our country, they like to come and build businesses and houses for their families in Sri Lanka. Hence, this will be a great advantage for us to attract monies of those Sri Lankans. Those types of opportunities are very interesting for us,” he added.

The Governor said that bilateral discussions were held with the respective Central Banks of the two countries and officials of large private banks including Emirates NBD Bank, Noor Bank, National Bank of Abu Dhabi, First Gulf Bank and Mashreq Bank.

Mahendran, commenting on their visit to Noor Bank, said: “We are very happy that Noor Bank is keen on expanding its activity in Sri Lanka and we would like to facilitate this endeavour. The relationships we are building through these meetings are sure to lead to prosperity and mutual benefit.”

During the visit, Noor Bank discussed its interests in Sri Lanka and showcased its best practices and expertise in the UAE banking sector as well as its adherence to Sharia compliant principles.