A Brief Colonial History Of Ceylon(SriLanka)
Sri Lanka: One Island Two Nations
A Brief Colonial History Of Ceylon(SriLanka)
Sri Lanka: One Island Two Nations
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Thiranjala Weerasinghe sj.- One Island Two Nations
?????????????????????????????????????????????????Saturday, May 13, 2017
State banks left with more cash for SMEs as public sector borrows less
Dr. Indrajit Coomaraswamy
by Sanath Nanayakkare-May 12, 2017
Small and Medium Enterprises (SME) in the country have taken a larger
share of the credit granted to the private sector by the Bank of Ceylon
and the People's Bank as lending by the two state banks to the public
sector has moderated, Governor, Central Bank of Sri Lanka (CBSL) Dr.
Indrajit Coomaraswamy said in Colombo recently.
Speaking to the media while announcing the Central Bank's monetary
policy for the foreseeable future, the Governor said," If you ask the
two state banks they will tell you that SMEs have taken a larger share
of their total credit pie to the private sector. Part of the reason for
this is that corporations like the Ceylon Petroleum Corporation and the
Ceylon Electricity Board have done reasonably well due to lower oil
prices. So, lending by the state banks to the corporations declined. On
the other hand, borrowings by the government from the two state banks
also went down somewhat due to the government's fiscal consolidation
programme. This combination left the two state banks with quite some
cash which was pushed out to the SMEs."
According to the Central Bank Annual Report 2016, credit extended to the
private sector by commercial banks continued to expand during 2016,
although there was a deceleration on year-on-year growth amid tight
monetary policy measures and the effect of the high base.
With aggressive marketing campaigns by commercial banks and ample
availability of funds as well as market expectations of upward
adjustments in the government tax structure, credit to the private
sector continued to accelerate during 2016 in spite of the upward
adjustments in market interest rates
The acceleration observed in credit to the private sector in 2015
persisted in 2016, recording a peak growth of 28.5%, on a year-on-year
basis by end of July 2016. However, the year-on-year growth of credit to
the private sector moderated towards the latter part of 2016 and
recorded a growth of 21.9% by end 2016, compared to 25.1% at the end of
2015, reflecting the impact of tight monetary policy measures and the
high base.
According to Coomaraswamy, overall credit granted by the banks to the
government, to the private sector and to the corporations currently
stands at 18%.
"We'd like to see this number around 15%. By our reckoning overall
credit granted to these three pillars should moderate to 15% by the end
of the year, the Governor said.