Banks must focus on capacity building - Chandula

By Cheranka Mendis

Sri Lankan banking sector, now poised for inevitable growth must focus on building capacity and forming an inclusive growth in the economy. The banking sector which recorded growth in the first quarter of the year now has to plan for the future and that planning must include capacity building within the country.

Deputy General Manager (Marketing and Retail Banking) of Hatton National Bank (HNB) Chandula Abeywickrema speaking to the Daily FT stated that in the light of development taking place in Sri Lanka, banks and other institutions need to focus significantly on capacity building requirements.

“With development in hand and as the country reaches for an 8% GDP growth level, it should be said that we have now arrived at one of the most opportune moments for business development in the country. There couldn’t have been a better environment than this,” Abeywickrema said.

“Internally we are at a confident level with a stable government, infrastructure being developed, public-private sector dialog etc. Like minded bodies and institutions, chambers and other bodies must be involved in capacity building.”

“Everything is positive in outlook and commitment and after 30 years of war we have a positive framework created and possibility of all stakeholders of the country - whether it’s the government, commercial leaders or the people everyone has one vision: to develop and reap benefits of this development,” Abeywickrema asserted.

In this backdrop it has created an ideal condition for banks and financial institutions to look at the big picture. “It is also an ideal opportunity to look beyond short term and to look at middle term, long term and very long term visioning. Banks, apart from capitalising opportunity available today must look to create a base, platform and foundation for the long journey.”

Capacity building therefore is an area that definitely needs more concentration on, he said. “We have seen banks rapidly moving to rural areas in many parts of Sri Lanka and particularly to the North and East. So many branches creating access is absolutely important.” However what’s more important is for banks and financial institutions to take a good look at the big picture and all segments of society from corporate to commercial to SME. Whether it’s trade or services or industry and agriculture or whether it’s rural and urban Banks need to recognise the key requirements of the sectors and build internal capacity.  According to Abeywickrema to build capacity there are three things also known as the ‘3A’s’ that must be taken into consideration.

1) availability

2) affordability

3) accessibility

“You can open a branch but if the services are not affordable it’s not accessible to people,” he pointed out, “This is the situation across all sectors. Make sure the three components go hand in hand right across all sectors.”

Banks must take a flexible approach with clear consciousness to be engaged broadly by looking at enriching themselves in the bottom line by empowering society and enhancing capacity. Abeywickrema expressed that this was the route HNB has taken over its existence of 120 years. “We have significantly built capacity across all segments — we do lending to top level corporates in billions, to the state for infrastructure development etc, for corporate level mega development projects and also for small, medium and micro entrepreneurs,” he outlined.

In the commercial and SME level capacity building takes an important turn. Critical capacity building as Abeywickrema points out in this segment are skilled people who understand the country, business and people requirement. “We have invested significantly in capacity building internally — resourcing the right people with necessary technical skills as well as who are very pragmatic in their approach; people who can understand situations from a ground level and people who can partner with projects and entrepreneurs; who can jointly work towards a shared vision. We have invested considerably for this.”

To assist their vision and for capacity building HNB has created a dynamic partnership with regulators (CBSL) as well as key chambers, industrialists, economists and agro experts. “We gave gone out of the way to build capacity — not just lending but capacity building in the frontier level.” Abeywickrema shows that being a corporate partner of ICASL as an example for the high level partnership. HNB is also involved with institutions like Industrial Development Board etc. and similar companies to trickle down benefit to the micro level development in the rural areas.

 Partnerships with Holcim, Hayles, CIC, and Fontera seal the deal in this area.  With inclusive development as its objective, HNB has done well in Q1 of the year — a clear indication of what is yet to come. Abeywickrema stated that with success on its wings other banks and financial institutions which have also in general said to have marked growth in the Q1 of the year must now look at long term sustainability which would help “life circles blossom up.”

“We need to keep the ball rolling. There needs to be a balance approach and you need to keep evolving and developing things and that is the cardinal rule for commercial banks,” Abeywickrema said, “very long term vision, not a static one but an evolving one would ensure capacity  building  and development of banks.”