Post-war bullish Indian Bank to expand operations to Jaffna

By Cassandra Mascarenhas

Delving into the massive opportunity calling out from the north and east of Sri Lanka as many other banks have already done, one of the biggest banks in India, the Indian Bank, is now planning on expanding its operations by opening a branch in Jaffna.

Slated to commence operations in January 2011, it will be the bank’s second branch opening in Sri Lanka, following the first in Colombo.

“We have already received permission from the Government of India and the Central Bank of Sri Lanka to set up a new branch in Jaffna. I met all the local authorities in this regard and the idea is to extend our footprint to other geographies in Sri Lanka in this manner. Our first branch was in Colombo, now the second is in Jaffna and soon a third will be in Trincomalee,” said the Chairman and Managing Director of Indian Bank Shri T.M. Bhasin.

Governor of the Central Bank of Sri Lanka Ajith Nivard Cabraal, the Deputy Governors, the High Commissioners of both India and Sri Lanka and also the most valued customers of the Colombo branch of the Indian Bank all met in regard to this expansion and have all expressed their fullest support. Discussions with the higher authorities revealed that Jaffna offered a lot of scope for setting up self-help groups, a field in which the Indian Bank has a lot of experience as pioneers of microfinance in India.  Starting off in Pondicherry, it has set up over 50,000 Self Help Groups (SHGs) and is now planning on expanding that same treatment to Jaffna.

“What we do through SHGs is form groups of 10 to 15 people from the same locality or working group. We train them in using local resources and converting it into marketable products and then the bank also helps them market the products.  These are the type of services we hope to offer in Sri Lanka as well,” he explained.

There are currently 73 domestic commercial and specialised bank branches operating in Jaffna at the moment, including one foreign bank, HSBC; 17,387 Samurdhi Small Groups also currently operate in the district.

The Indian Bank has so far conducted these operations in all geographical parts of India successfully and these branches are referred as microfinance business branches. The Jaffna branch will be similar to this and will have the facilities of hire purchasing, SHG formations and support for SMEs.

The fact that many people from Jaffna escaped to various countries like India, Canada, UK and Australia for reasons like education, jobs, etc. during the time of the conflict also gives them good scope for business in remittances.

According to the Chairman of the bank, the higher authorities in Sri Lanka feel that much activity could happen with such support from the Indian Bank. Meanwhile, 50,000 houses are likely to be constructed in the northern peninsula in the near future with the support of the Indian Government and the bank is hoping to play a key role in this project as well.