Bankers engaged in leasing form new front

By Charumini de Silva

Banks engaged in leasing recently launched a separate representative body, named the ‘Leasing Council of Bankers of Sri Lanka,’ comprising all licensed commercial banks and specialised banks.

The Leasing Council of Bankers of Sri Lanka (LCBSL) has been formed with 13 key objectives to promote leasing, hire purchase and loan financing as a desirable method of financing in the country, with a view to safeguard the interests of members, customers and all stakeholders. 

The LCBSL appointed Priyantha Wijesekara (Nations Trust Bank) as President, while Saman Kalansooriya (Commercial Bank), Kanchana Karunagama (Hatton National Bank) and Gillian Edwards (DFCC Bank) were appointed as Vice Presidents. 

Jeewantha Perera (Hatton National Bank) – General Secretary, Shiyan Perera (PABC Bank) – Assistant Secretary, Keshan Dabare (Sampath Bank) – Treasurer, H.S. Jayawardana (Bank of Ceylon), Ajith Senadeera (National Development Bank), Delvin Pereira (Seylan Bank) and Siddique Akbar (Amana Bank) were appointed as Executive Committee Members at its first General Meeting held on 15 June in Colombo.

LCBSL President Priyantha Wijesekara said: “Banks engaged in leasing activities have unanimously voiced the need for a dedicated association representing the leasing interests of the banking sector. Hence, we believe there is strong potential for progression, particularly with the banking sector playing an enabling role in propagating the use of emerging technologies and sophisticated transaction structures.”

Noting that the leasing industry plays a critical role in facilitating capital formation in the Sri Lankan economy, particularly in the micro and SME sectors, which have limited financing avenues, he added that in recent years the Government has actively encouraged banks to support financing requirements of the SME sector.

“In aligning with this national thrust, the banking sector has proactively catered to the growing needs of SME leasing and currently offers leasing products as part of their holistic customer proposition. In this backdrop, the sustainability and effectiveness of the leasing industry is instrumental in supporting the development of the country’s financial sector and the economy as a whole,” he stressed.

At present, almost all commercial banks engage in leasing although at varying degrees, with leasing accounting for 6.1% of the industry’s total loans and advances as at end December 2015.

Wijesekara pointed out that there was a growing consensus amongst the banks regarding the need for an industry body representing the leasing interests of the banking sector.

However, he emphasised that they were aware that despite its growth over the past three decades, there had been limited progression in the country’s leasing industry, especially in terms of assets financed as the bulk of leasing was linked to vehicles. The sophistication of structures and adoption of emerging technologies also need to be given prominence within the industry.

“We believe the industry presents numerous opportunities for growth and evolution, including financing of machinery and equipment in manufacturing, healthcare and hospitality as well as ship and aircraft financing given the anticipated expansion in the infrastructure sector,” he noted.

The sophistication of the banks in adopting technology as well as the sector’s product innovation, effective risk management and the skills and industry insights of its employees augur well for the country’s leasing industry development if given an enabling environment, he explained.